Competitive Tendering Cuts OWF Grid Connection Costs by GBP 700M

Competitive tendering is cutting the costs for connecting offshore wind farms to British high voltage grid by at least £700m, according to new figures published by Ofgem today. 

Maxine Frerk, acting senior partner, networks, Ofgem, said: “The figures published today show that competition is helping to deliver savings for consumers for connecting offshore wind.”  

The tender regime, launched in 2009, is run by Ofgem, which chooses the most competitive bids made by firms to own and run links to offshore wind farms over a 20-year period.

The savings are accumulating in the 20-year period, over which new owners will run the links. Fifteen tenders have now been completed and the first licence for a firm to run one of the links was granted in 2011, Ofgem said.

The fourth tender round will be officially launched next month, when bidders will compete for the right to own and run the link to the Burbo Bank Extension, a 258MW wind farm in the Bay of Liverpool.

Ofgem expects to launch the fifth tender round this autumn.

“The regime attracts new companies into Britain’s energy market and it has brought in £2.7bn investment so far. We expect a further £2bn of investment in the projects for tender rounds four and five. We want to continue to get the best deal for consumers from network regulation. So from next year we plan to open up high value upgrades to the onshore high voltage grid to competition,” Frerk concluded.