Offshore connection tenders ‘saved UK £700m’

The costs for linking offshore wind farms to the UK grid has been reduced by at least £700 million so far. Ofgem claims that’s the result of its tendering regime, which […]

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By Priyanka Shrestha

The costs for linking offshore wind farms to the UK grid has been reduced by at least £700 million so far.

Ofgem claims that’s the result of its tendering regime, which chooses the most competitive bids made by firms to own and run links to offshore wind farms over a 20-year period.

The latest figures from the regulator, which have been produced by independent consultants, are based on the first three tender rounds.

The first licence for a company to run one of the links was granted in 2011.

The fourth tender round will officially be 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.

According to Ofgem, competitions for owning the links will further reduce costs for connecting wind farms and running the electricity grid as a whole.

Maxine Frerk, Acting Senior Partner for Networks at Ofgem, said: “When Ofgem and the Department for Energy and Climate Change launched the tender regime it was a world first. The figures published today show that competition is helping to deliver savings for consumers for connecting offshore wind.

“The regime attracts new companies into Britain’s energy market and it has brought in £2.7 billion investment so far. We expect a further £2 billion 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.”