Balfour grab Thanet transmission

Felix Würtenberger, Vattenfall’s BU Renewables Director of Commercial Steering and head of the transaction team, said: “We are very pleased that Thanet Offshore Wind Farm has now unbundled its transmission assets. Thanet is a very successful offshore wind farm and with the transaction complete we can now focus on maximising Thanet’s significant contribution to low carbon electricity supply in the UK.”

Vattenfall installed Thanet Offshore Wind Farm’s two 26km cables in 2009 and the wind farm started exporting power to the National Grid in 2010.

Ofgem have also added,

Thanet becomes the ninth and final offshore transmission project to reach financial close and licence grant in tender round one of the innovative regime. The first tender round has delivered over £1.1 billion of transmission assets, connecting 1.5 GW of offshore wind. Thanet offshore wind farm, located off the Kent coast, comprises 100 turbines with an installed capacity of 300MW.

The innovative approaches used by OFTOs for financing, operating and maintaining offshore transmission assets have also led to significant cost savings for consumers, between £200 million and £400 million in the first tender round alone. A key reason for this is the competitive pressure from the tender process, which results in efficient costs of financing and running the assets. With future projects being further from shore and more complex the competitive tendering approach is expected to achieve even greater savings in future.

Dermot Nolan, Ofgem chief executive, said: “With the licence granted for Thanet, we mark a major milestone for the offshore regime. The successful competitive process has saved consumers hundreds of millions of pounds. To date the regime has attracted over £1.9 billion of new investment into the UK transmission sector including £1.1 billion from the first tender round alone. Billions of pounds of further investment will be needed by 2020 to connect the wind farms under development.

“Introducing competition to offshore transmission has demonstrated the savings that can be achieved for consumers and we must now look at opportunities to introduce competition elsewhere. We have recently set out proposals to extend competition to new Strategic Wider Works projects onshore and to improve the OFTO built model offshore.”

Energy and Climate Change Secretary Ed Davey said: “We’ve secured £1.9 billion of investment, bringing new companies and sources of finance into the sector as a result of this new regime. The new competitive tender process is also giving better value for bill payers, delivering savings of up to £400 million, so it is proving to be hugely successful.”