Ofgem has granted Gwynt y Môr OFTO plc a licence to own and operate the £352 million transmission link to the Gwynt y Môr offshore wind farm.
Competitive tendering for ownership of the assets has driven down costs for consumers. The regime has delivered over £800 million of investment in the last 6 months alone.
At £352 million it is the largest OFTO project to date to be financed through the capital markets. This innovative financing approach opens up investment in the OFTO regime to a wider range of investors, helping to drive down the costs for consumers of connecting offshore wind farms to the onshore grid.
Gwynt y Môr OFTO plc is owned by the Balfour Beatty Equitix Consortium, a consortium comprising Balfour Beatty Investments Limited and Equitix Limited. It was selected by Ofgem through a competitive process, in which bidders compete to become offshore transmission owners (OFTOs), and will now own and operate the link for the next 20 years.
Martin Crouch, senior partner for transmission, said: “With the licence granted for Gwynt y Môr OFTO, the OFTO regime has attracted over £2.2 billion of new investment into the UK transmission sector to date. This is just a part of up to £10 billion of investment in offshore and cross-border investment that we are expecting by the end of decade. The regulatory frameworks devised by Ofgem are key to attracting the new investment needed to extend grid networks to connect renewable energy projects, and to enable planned interconnectors with European partners to be built.”
Jonathan Taylor, European Investment Bank, said: “Investment in renewable energy helps to reduce carbon emissions and benefits local economic activity. The European Investment Bank is committed to supporting energy investment across the UK, including development of the offshore wind energy sector. We are pleased to be able to support the Gwynt y Môr project using the Project Bond Credit Enhancement facility and continue our close cooperation with OFGEM to finance the connection of offshore windfarms to the national grid using a range of financing structures. The scheme is already creating jobs in north Wales and elsewhere, and clearly demonstrates the huge potential of harnessing wind energy in UK waters.”
Gwynt y Môr Offshore Wind Farm Limited is a joint venture owned by RWE Innogy, Stadtwerke München GmbH and Siemens. It is located in the Liverpool Bay area, approximately 8 miles off the North Wales coast, and comprises 160 Siemens 3.6MW turbines with a maximum installed capacity of 576MW. RWE Innogy estimates that the wind farm will be capable of generating enough energy from renewable sources to power the equivalent of approximately 400,000 homes.