.gif)
This is part of a joint Department of Energy and Climate Change (DECC) and Ofgem scheme to encourage investment in high voltage transmission links for the potential 50GW of new offshore wind generation.
Strong competition has attracted almost £4 billion of investment appetite for all nine transmission links worth around £1.1 billion. The competitive approach has seen five consortia bid for the right to own and operate offshore transmission links in return for a 20-year regulated revenue stream. The current tender round has resulted in overall forecast savings of £350 million for offshore wind farms and ultimately consumers.
-- Advertisement --
Ofgem's Chief Executive Alistair Buchanan said: "Attracting almost £4 billion of investment appetite in today's capital markets, following the financial crisis, shows how an Ofgem-run competitive regime for regulated revenue streams can prove very effective at attracting investment.
"By ensuring companies have to compete for this regulated revenue stream, we have been able to keep costs to consumers and wind farm developers as low as possible, delivering forecast savings of £350 million compared to equivalent onshore transmission costs."
The successful bidders from this tender round will own and operate links for around 2 gigawatts (2 GW) of renewable electricity for Britain's first wave of offshore wind farms.
These decisions follow the setting up of the Offshore Transmission Regime by DECC and Ofgem's delivery arm, Ofgem E-Serve, to deliver the high voltage links to offshore wind farms as cost effectively as possible.
Ofgem will commence a second transitional round of tenders later this year for assets for around 2GW of capacity, with a potential asset value of around £1.8 billion.
(CD/GK)
