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£1.9bn tender for transmission links to UK offshore wind farms

UK’s Ofgem has announced a £1.9 billion tender round for transmission links to 2.8 GW of offshore wind farms.

This is the second tender round for high-voltage transmission links for 6 offshore wind projects. The winners will be announced in the summer of 2011.

The tender round is part of the offshore transmission regime, which is a joint policy initiative between DECC and Ofgem, to encourage cost-effective investment in the vital network links between the offshore wind farms and the mainland grid.

Companies will be competing for the right to own and operate the links to 2.8 GW of offshore wind farms for the next 20 years. So far competition has been fierce, with almost £4 billion of investment appetite chasing the £1.1 billion of transmission links in the first tender round announced in August this year, Ofgem says.

Charles Hendry, Minister of State for Energy, comments: “We have 40% of Europe’s wind and we have 11,000 km of coastline. We ought to be using those resources for our future energy security, but to do this we need to get the investment in the infrastructure that will make this happen.

“I hope the second round of tendering for owning and operating the links to offshore wind farms will be as successful as the first, where investment interest was four times the necessary level. This competition also means savings for generators and consumers, which I very much welcome”.

Ofgem’s Chief Executive Alistair Buchanan, adds: “Britain needs to attract £200bn of investment in its energy industry over the next 10 years – £20bn will be for offshore transmission links. Therefore it is very encouraging that we have seen such strong competition for the first round of transmission links.

“This looks set to continue for the second round and healthy competition will keep the costs of the links as low as possible and give generators confidence that the offshore regime is proving very attractive to investors and is bringing new players into the UK transmission market.”

Tenders for the first three offshore wind projects, Gwynt-y-Mor, Lincs and London Array, have started. Tenders for the other three, Humber Gateway, Race Bank and West of Duddon Sands, are expected to start in spring 2012 once they have met the necessary qualifying requirements.

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