Ofgem to Link Offshore Wind to U.K Grid

By Susanna Twidale, Reuters

U.K. energy regulator Ofgem on Wednesday launched a £400 million tender for linking offshore wind farms in the North Sea to Britain's national power grid.

Ofgem is calling for firms to construct high-voltage transmission links to connect the Westermost Rough wind farm owned by WMR Limited, part of DONG Energy, and the Humber Gateway wind farm owned by E.ON., to the grid, Ofgem said in a statement.

The two sites have a combined capacity of 425 megawatts, while the successful bidders will receive a guaranteed revenue stream for 20 years, Ofgem said.

Offshore wind farm developers are required by the regulator to open their transmission assets for tender to encourage competition and lower prices.

Last September a consortium including Barclays Infrastructure Funds Management Limited and a subsidiary of Mitsubishi Corporation won a tender, allowing them to maintain and operate the transmission link to the London Array offshore wind farm for 20 years.

The British government aims to install 8-15 gigawatts of offshore wind capacity by 2020 to help meet emissions reduction goals and European renewable energy targets.

But in the past few months several firms including DONG, EON, RWE and Iberdrola (IBE.MC)-owned Scottish Power have all scrapped or scaled back huge offshore wind farm projects, citing environmental issues or the costs involved in developing deepwater sites.

Britain has 22 operational offshore wind farms with 3,653 MW of capacity and a further 1.4 GW under construction, according to the U.K.'s Department of Energy and Climate Change (DECC).