UK energy regulator Ofgem said that its competitive tendering regime is reducing the costs for linking offshore wind farms to the UK grid by about £700m.

The figures, produced by independent consultants for Ofgem, are based on the initial three tender rounds.

The regime selects the most competitive bids made by the companies to own and run links to offshore wind farms over a 20-year period.

Fifteen tenders have now been completed, with the fourth tender round to be launched next month to compete for the right to own and run the link to the 258MW Burbo Bank Extension in the Bay of Liverpool.

The regulator expects to launch a fifth tender round in the autumn.

Ofgem networks acting senior partner Maxine Frerk said: "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."