Successful bidders will become offshore transmission owners (OFTOs). The new regime intends to help connect wind-generated electricity enough to power more than 10 million homes by 2020, and ensure offshore cable connections are delivered on time and at reasonable cost to maintain an effective and secure grid.
Ofgem Chief Executive Officer Alistair Buchanan said the infrastructure needed to connect new offshore renewables has never before been constructed on this scale. Opening this up to competitive tender ensures it can be delivered more quickly and cost-effectively.”
This is a huge opportunity – for new entrants and companies already active in the GB market – to invest in these assets under a long-term and low-risk regulatory regime, Buchanan added.
Competitive tendering aims to lower the cost of building and operating the assets; enable new players to bring innovative technical, operational and financial solutions to the connection of offshore wind farms; lead to a more light touch regulatory approach since there will be no need for a regular review of the prices charged by the OFTOs; the Department of Energy and Climate Change and Ofgem have also announced a final opportunity to comment on the new framework up to May 6, 2009.
Energy and Climate Change Minister, Mike O’Brien said this is a key building block in delivering the offshore grid we will need by 2020.”
Wind power could potentially make the single biggest contribution to our 2020 renewable energy target. It is vital we maximise the UK’s natural resources to help in the fight against climate change and reduce our reliance on volatile foreign oil and gas markets.
