UK 12 OFTO's 2014/15 exceeds world beating £166 million revenue
By:
Chris Anderson
26/11/2015
4C
In the latest report published by OFGEM the
12 Offshore Transmission Owners(OFTO's) share of the revenue generated
by the 12 associated Offshore Wind developments was £166 million. It
is estimated that offshore wind currently contributes to 5% of annual UK
electricity requirements, with the UK generating more electricity from
wind than any other country in the world.
To date, over £2 billion has been committed to the development of OFTOs.
In the year 2014/15 the OFTOs enabled the transmission of over 9 TWh of
electricity (1 TWh can keep the UK National rail network moving for
over three months). Of course the MWh output of the wind farms is subject
to the availability of the offshore transmission assets, as well as operational
factors such as wind conditions and turbine performance however the total
system availability since the first licence grant to March 2015 is over
99%. Blue Transmissions London Array and Greater Gabbard OFTO Plc were
by far the biggest returns with earnings of £37,573,000 and £26,003,000
respectively. Blue Transmissions OFTO's in total earned £81,915,000
- almost half the overall total.
As well as investment in the wind farms themselves, the growth in offshore
wind power requires significant investment in a new offshore transmission
network. To facilitate this, the government, in collaboration with
Ofgem, established a competitive, asset-based regulatory regime for the
sector allowing private companies to take control of the assets required
and manage them within government guidelines. In this way new offshore
renewable generation projects are connected to Great Britain’s onshore
electricity network.
The regime, launched in July 2009, awards licences to Offshore Transmission
Owners (OFTOs) through a competitive tender. The licence entitles the OFTO
to a 20 year revenue stream indexed to UK Retail Prices Index (RPI) inflation.
The first licence was granted in March 2011 and by 31 March 2015 there
were 12 OFTOs in operation. Nine of the licences were granted under the
offshore regime’s first competitive tender round, Transitional Tender
Round 1 (TR1).
Three licences were granted under the second competitive tender round,
Transitional Tender Round 2 (TR2). The OFGEM report details the revenue
achieved by each.