Balfour Beatty OFTO at Gwynt y Mor
A group led by Balfour Beatty has won the right to own Gwynt y Mor’s transmission links, as the early “transitional” bidding rounds within the UK’s Offshore Transmission Ownership (OFTO) regime draw to a close.
Balfour Beatty, the UK infrastructure giant, was named preferred bidder by energy regulator Ofgem to own and operate the power cables for the 576MW Gwynt y Mor project.
The high-voltage transmission links carry an estimated value of £346m ($532m), adding to Balfour Beatty’s existing OFTO assets at Greater Gabbard and Thanet.
Gwynt y Mor – owned by RWE, Stadtwerke München and Siemens – is one of the last UK offshore wind projects to see its transmission assets tendered out under the “transitional” OFTO rounds, in which project developers have not been allowed to build their own links.
Under the future “enduring” OFTO regime, encompassing Round 3 projects and beyond, developers will have the option to build their own subsea links to ensure projects are delivered on time, before divesting ownership of the links at a later date – an important change the industry has pushed for.
Last month Ofgem unveiled the four bidders shortlisted as preferred owner of the links at West of Duddon Sands, the final project to be included in the transitional OFTO regime.
Only a tiny handful of investors – led by Balfour Beatty, Transmission Capital Partners, and Blue Transmission (which includes Barclays Infrastructure Funds, Macquarie Capital and Mitsubishi) – have won any OFTO bidding rounds, leading many observers to condemn the system's design and execution.
Earlier this year the OFTO regime came under heavy fire from influential Members of Parliament, who noted that the terms of early licenses were “extremely generous” and seemed designed more with investors in mind than the taxpayers who will ultimately pick up the bill.
The first tender round within the enduring OFTO regime – known as TR3 – is slated to launch later this year.
The first turbine was installed at the Round 2 Gwynt y Mor this spring.