The Office of Gas and Electricity Markets (Ofgem) has announced the largest field of bidders since 2019 for the ownership and operation of the vital offshore electricity transmission links connecting three major North Sea wind farms to Great Britain’s national grid. The competitive tender underscores significant investor confidence in the UK’s renewable energy sector.
Five distinct consortia are currently competing for the rights to these pre-built transmission connections, which are estimated to be worth a combined £3.5 billion.
These crucial assets, comprising onshore and offshore cables, converter stations, and substations, are designed to transmit power from the East Anglia THREE, Inch Cape, and Dogger Bank C wind farms, capable of supplying millions of homes with clean electricity.
The bidding groups that have advanced in the process are:
- Diamond Transmission Partners, formed by Diamond Transmission UK Ltd
- Equitix, formed by Equitix Investment Management Ltd
- Gravis Sosteneo Consortium, a joint venture of Gravis Capital Management Ltd and Sosteneo Fund II HoldCo S.à.r.l.
- John Laing, a group comprising Laing Investments Management Services Ltd and John Laing Ltd
- Transmission Capital Partners, a consortium including International Public Partnerships Ltd, Transmission Capital Partners Ltd Partnership, and Transmission Investment Holdings Ltd
Beatrice Filkin, Ofgem’s director of major projects, emphasised the strategic importance of these investments. “Recently, we’ve seen how geopolitical events can impact both energy security and investments,” Filkin stated. “Ofgem’s OFTO regime not only helps boost British energy security but also offers investors a safe and steady asset for their portfolios.”
She added that “Through the OFTO regime, Ofgem is attracting vital investment into the UK to support growth and deliver a stable, secure energy system powered by clean electricity, while also ensuring consumers get a good deal.”
The Offshore Transmission Owner (OFTO) regime, established by Ofgem, involves a competitive tender process where developers build transmission assets and then sell them to a separately licensed OFTO to operate and maintain for a fixed period, typically 25 years. This approach aims to foster competition, attract private capital, and ultimately reduce costs for consumers.
The five shortlisted bidders will now be invited to submit their formal tenders. Following this, Ofgem will select a preferred bidder for each of the projects, who will subsequently be issued with a transmission licence to operate one or more of the three OFTOs.
The wind farms involved represent significant contributions to the UK’s renewable energy capacity:
- East Anglia THREE: Situated 69km off the East Anglian coast, this wind farm is projected to generate up to 1.4GW, sufficient to power more than 1.3 million homes.
- Inch Cape: Located approximately 15km off the Angus Coast in the North Sea, this Scottish offshore wind farm features 72 turbines and possesses a generation capacity of almost 1.1GW.
- Dogger Bank C: Positioned 196km offshore, this project alone boasts a generation capacity of 1.2GW. It forms part of the wider Dogger Bank Wind Farm, which, including Dogger Bank A and B, will be the world’s largest offshore wind farm with an installed capacity of 3.6GW, capable of powering up to six million homes annually.
