Offshore transmission owner

Offshore Transmission Owners (OFTOs) operate and maintain electrical transmission assets in the United Kingdom electricity market. In some cases, they also design and build these assets. In other cases, Generators design and build the electrical transmission assets and then transfer them to OFTOs at construction completion.[1][2][3][4]

In the United Kingdom electricity market different interests are separated, with this practice beginning in the 1980s. The activities of generator, transmission operator, system operator, distribution operator and supplier are separately licensed by Ofgem.[5]

The groundwork was laid by the Energy Act 2004, with the first offshore transmission license being awarded in 2011. As at 2021 all the OFTO assets in the UK have been built by the wind farm developer, who then is required to sell the transmission assets to a separately licensed Offshore Transmission Owner or OFTO. Developers are required to divest these assets because their generation license forbids them from also owning transmission assets. The divestment must take place before the Generator Commissioning Clause date, the date on which its exemption from this requirement lapses.[5]

Divestment is managed via a regulated tender process administered by the energy regulator Ofgem. Qualifying bidders are required to conduct due diligence before submitting a bid to purchase the assets for transfer value determined by Ofgem and receive their bid Tender Revenue Stream (TRS) for a fixed license period. Ofgem then appoints a Preferred Bidder who negotiates the purchase terms with the Developer, after which Ofgem awards a transmission license and the transfer takes place.

OFTO Transactions

[6]

Tender Round 1
OFTODeveloperCapacity (MW)Final Transfer Value (£m)Operator License Award Date
Robin Rigg OFTOE.ON18065.5Transmission Capital Partners 2 March 2011
Gunfleet Sands OFTODONG17349.5Transmission Capital Partners 19 July 2011
Barrow OFTODONG and Centrica9033.6Transmission Capital Partners 27 September 2011
Walney 1 OFTODONG, SSE and OPW184105.4Blue Transmission 21 October 2011
Ormonde OFTOVattenfall150103.9Transmission Capital Partners 10 July 2012
Walney 2 OFTODONG, SSE and OPW184109.8Blue Transmission 26 September 2012
Sheringham Shoal OFTOScira315193.1Blue Transmission 27 June 2013
Greater Gabbard OFTOSSE and RWE504317.1Equitix Group 26 November 2013
Thanet OFTOVattenfall300164.8Balfour Beatty 17 December 2014
Tender Round 2
OFTODeveloperCapacity (MW)Final Transfer Value (£m)Operator License Award Date
London Array OFTODONG, E.on and Masdar630444Blue Transmission 10 September 2013
Lincs OFTODONG, Centrica, and Siemens270307.7Transmission Capital Partners 4 November 2014  
Gwynt y Môr OFTORWE, Stadewerke München and Siemens574351.9Balfour Beatty 11 February 2015
West of Duddon Sands OFTODONG and Scottish Power Renewables388268.9West of Duddon Sands Transmission Plc 19 August 2015.
Tender Round 3
OFTODeveloperCapacity (MW)Final Transfer Value (£m)Operator License Award Date
Westermost Rough OFTODONG, Marubeni and GIB205172.3Transmission Capital Partners 3 February 2016
Humber Gateway OFTOE.ON219173.3Balfour Beatty September 2016
Tender Round 4
OFTODeveloperCapacity (MW)Final Transfer Value (£m)Operator License Award Date
Burbo Bank OFTODONG258193.9Diamond Transmission Partners 25 April 2018
Tender Round 5
OFTODeveloperCapacity (MW)Final Transfer Value (£m)Operator License Award Date
Dudgeon OFTOStatoil402297.9Transmission Capital Partners 5 November 2018  
Race Bank OFTOOrsted573472.5Diamond Transmission Partners 9 October 2019
Galloper OFTORWE340281.8Diamond Transmission Partners 24 February 2020
Walney Extension OFTOOrsted600446.6Diamond Transmission Partners 1 June 2020
Rampion OFTOE.ON400302.9 (indicative)Transmission Capital Partners (preferred bidder)[7] expected 2021
Tender Round 6
OFTODeveloperCapacity (MW)Final Transfer Value (£m)Operator License Award Date
Hornsea One OFTOOrsted12181170Diamond Transmission Partners 1 March 2021
Beatrice OFTOSSE, Red Rock Power Ltd, The Renewables Infrastructure Group and Equitix588437.9Transmission Capital Partners 27 July 2021[8]
East Anglia One OFTOScottishPower Renewables and Vattenfall714715.1 (indicative)Transmission Capital Partners (preferred bidder)[9]


Tender Round 7[10]
Triton Knoll OFTO (currently tendering)
Moray East OFTO (Awaiting tendering)

Tender Round 8[11]
Hornsea Two OFTO (Awaiting tendering)

References
  1. "Offshore transmission". www.ofgem.gov.uk.
  2. "Practical Law UK Signon". uk.practicallaw.thomsonreuters.com.
  3. Essential EU Climate Law, edited by Edwin Woerdman, Martha Roggenkamp, Marijn Holwerda, ISBN 1783470585
  4. Economics of Offshore Wind Power: Challenges and Policy Considerations By Rahmatallah Poudineh, Craig Brown, Benjamin Foley, ISBN 3319664204
  5. "The OFTO Regime: A Retrospective". WFW. 2020-11-11. Retrieved 2021-07-30.
  6. "Offshore Electricity Transmission (OFTO) - Offshore transmission tenders and projects".
  7. "Ofgem Selects Rampion OFTO Preferred Bidder". Offshore Wind. 2019-09-02. Retrieved 2021-07-30.
  8. News, Alliance (2021-07-29). "IN BRIEF: International Public Partnerships wins Beatrice project". MorningstarUK. Retrieved 2021-07-30. {{cite web}}: |last= has generic name (help); Check |url= value (help)
  9. "TCP wins OFTO tender for 714-MW East Anglia One link". Renewablesnow.com. Retrieved 2021-07-30.
  10. "Triton Knoll and Moray East OFTO Licence Auction Round Opens". Offshore Wind. 2020-12-04. Retrieved 2021-07-30.
  11. "Offshore Transmission: Generic Licence and Guidance for TR8". Ofgem. Retrieved 2021-07-30.



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