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UK’s Ofgem confirms changes in OFTO regime [free access]

November 30, 2018

The UK’s energy regulator Office of Gas and Electricity Markets (Ofgem) has announced its decision in relation to changes to the offshore transmission tender process under the Offshore Transmission Owner (OFTO) regime. This decision follows stakeholder responses in March 2018 to Ofgem’s OFTO tender process consultation for future tender rounds.

 

As reported, Ofgem is now increasing the length of the revenue term for offshore transmission licensees, from 20 to 25 years. It is also increasing the number of bidders that will be able to proceed to the invitation to tender (ITT) stage, from five to eight. Furthermore, the regulator will hold an additional enhanced pre-qualification (EPQ) stage as well as revisions to the manner in which tenders at the ITT stage will be evaluated.

 

 The changes will be implemented in the next tender round (TR 6) under the OFTO regime, which kicked off in October 2018. This is the sixth tender round Ofgem is conducting under the OFTO regime, with a total of GBP2 billion of transmission assets being tendered. In this round, Ofgem is opening a tender for OFTO links associated with the Ørsted’s 1.2 GW Hornsea Project One wind farm project located 120 km off the coast of Lincolnshire and Yorkshire, the 588 MW Beatrice wind farm project off the coast of Scotland, and the 714 MW East Anglia ONE wind farm project off the coast of East Anglia.

 

(GBP1=USD1.312)