UK opens tender for grid connection to nine offshore wind farms

22 July 2009 – The UK has opened a series of tenders for transmission licenses to connect offshore wind farms to the national grid.

Offshore wind power is the key strategy in the UK’s plans to reduce carbon emissions by 34 per cent on 1990 levels by 2020. To this end, London wants 33 GW of wind power developed either on or off its shores by that time.

On Tuesday, electricity regulator Ofgem (Office for Gas and Electricity Markets) opened the first of a series of tenders for offshore transmission licenses. The first tender was for nine offshore wind farm projects, either built or under construction, totalling some 2.065 GW.

The projects are:

-Barrow, East Cumbria (DONG Energy/Centrica, 90 MW);
-Robin Rigg, Dumfries and Galloway (E.ON, 173 MW);
-Gunfleet Sands 1 and 2, Essex (DONG Energy, 165 MW); -Sheringham Shoal, Norfolk (SCIRA, 317 MW);
-Ormonde, East Cumbria (Eclipse Energy Ltd, owned by Vattenfall, 150 MW);
-Greater Gabbard, Suffolk (Airtricity (SSE)/RWE, 504 MW);
-Walney 1, East Cumbria (DONG Energy, 183 MW);
-Walney 2, East Cumbria (DONG Energy, 183 MW);
-Thanet, Kent (Vattenfall, 300 MW).

A transmission license is expected to be granted for each project, Ofgem said.

As these projects are either built or being built, successful bidders “will enter into a transfer agreement…for the offshore transmission assets
with the existing developer in each case and then maintain and operate the assets in accordance with industry licenses, codes, standards and agreements,”
Ofgem said.

Ofgem said that in the event that the successful bidder and existing developer are unable to agree the terms of the transfer agreement, they may request that the regulator transfers the offshore transmission assets by means of a property transfer scheme.

Indicative asset transfer values for the projects are:

-Barrow GBP36.5m ($60m);
-Robin Rigg GBP58.7 million;
-Gunfleet Sands 1 and 2 GBP46.4m
-Sheringham Shoal GBP186.8m;
-Ormonde GBP87m;
-Greater Gabbard GBP343.7m;
-Walney 1, GBP99.4m;
-Walney 2, GBP104.4m;
-Thanet, GBP189m.

Future tenders for transmission licenses will fall under two categories – for ‘transitional’ or ‘enduring’ projects.

Transitional projects are those where the transmission assets are either already built, or are expected to be under construction or to have secured financing before the tender process begins.

Enduring projects are those that do not meet the criteria for transitional projects and will require offshore transmission licensees to design, build, finance and maintain the relevant transmission assets.