Tender for transmission links

Ofgem has announced that 13 companies have been selected to tender for the ownership and operation of nine high-voltage transmission links worth £1.15bn.

The announcement is said to mark a key milestone in the drive to expand the UK’s offshore wind industry.

Under the tender, licences will be granted for the nine projects, which have the potential to connect up to 2,000MW of renewable electricity. The tender round will run until March/April 2010, when the successful companies will be announced.

Alistair Buchanan, Ofgem’s chief executive, said: ‘Offshore generation has a crucial role to play if Britain is to meet its climate-change targets.

‘That is why selecting the first 13 firms to bid for the ownership and operation of £1.15bn of high-voltage transmission links is so important.

‘The quality of the firms selected for the tender round shows how strong the competition is to operate these offshore transmission links.’

A second round for assets that are built, under construction or at an advanced preconstruction stage will be held in summer 2010.

Companies that are successful in both of these tender rounds will take ownership of the transmission link once it is constructed. They will then run it and, in return, will receive a regulated income for 20 years.

The bidders that have qualified to proceed to the Qualification to Tender stage include National Grid Offshore, RWE Npower, SSE Offshore Transmission and Balfour Beatty Capital.

Ofgem estimates that, in total, more than £15bn will need to be invested in transmission links for offshore wind farms.