Ofgem awards £164m transmission licence for Thanet offshore windfarm

Ofgem has awarded the licence to own and operate Thanet offshore windfarm’s £164 million transmission assets to Thanet Offshore Transmission Owner (OFTO), bringing the first round of Ofgem’s offshore transmission regime to a close.

Thanet OFTO Limited is wholly owned by Balfour Beatty Investments. Balfour Beatty is also part of the consortium that owns and operates the offshore transmission links for the Greater Gabbard windfarm, and part of the consortium that has been appointed as the preferred bidder for the Gwynt y Môr offshore windfarm’s offshore transmission system.

Thanet offshore windfarm, located off the Kent coast, is owned by Vattenfall and it consists of 100 turbines and has an installed capacity of 300MW.

The OFTO regime was launched by Ofgem in 2009 and uses competitive tendering for licensing offshore electricity systems.

The first tender round has delivered over £1.1 billion of transmission assets in nine projects, connecting 1.5GW of offshore wind. Ofgem said the competitive pressure of the tendering process has led to more efficient costs and savings for consumers of between £200 and £400 million from the first round alone.

Ofgem’s chief executive, Dermot Nolan said: “With the licence granted for Thanet, we mark a major milestone for the offshore regime. The successful competitive process has saved consumers hundreds of millions of pounds.”

He said that “billions of pounds of further investment will be needed by 2020” to connect the offshore windfarms that are currently being developed.

Nolan added: “Introducing competition to offshore transmission has demonstrated the savings that can be achieved for consumers and we must now look at opportunities to introduce competition elsewhere.”