Hornsea Project One's transmission assets worth over £1 billion

In: CablesGridSubstationsWindfarms
The Office of Gas and Electricity Markets (Ofgem) has published the Final Transfer Value of the Hornsea Project One wind farm's offshore transmission assets. The Authority has assessed the economic and efficient costs which ought to have been incurred in connection with developing and constructing the Transmission Assets, and values the assets at  £1,174,931,778.

Ofgem does not expect any further changes to the Assessed Costs. However, it will not finalise the Final Transfer Value until the Authority has determined to grant an offshore transmission licence to the successful bidder.

Last year, Ofgem named Diamond Transmission Partners as the preferred bidder for the offshore transmission system at the
Hornsea Project One offshore wind farm. Diamond Transmission Partners is a consortium of Mitsubishi Corporation and Chubu Electric Power. Diamond Transmission Partners will be responsible for transmission of electricity from this wind farm to the UK's onshore National Electricity Transmission System.

Developed by Danish energy giant Ørsted,
Hornsea Project One is the world’s largest offshore wind farm to date. It is located in the North Sea off the east coast of England. The site consists of 174 Siemens Gamesa Renewable Energy. SWT-7.0-154 turbines, spanning across an area of 407km2, all of which have been installed. The site was fully commissioned at the end of 2019 and is anticipated to power over one million homes in the UK.

The transmission assets for
Hornsea Project One have been tendered under the sixth tender round of Ofgem's OFTO regime which saw around £2 billion of transmission assets being tendered.

Ofgem also announced today that it has
opened a consultation regarding amendments to Hornsea Project One's offshore transmission licence. Proposed modifications includes adding a contingent event revenue adjustment mechanism (the CEA mechanism). In summary, the CEA mechanism is a bespoke pass-through item for this Licence. It allows the Authority to adjust the Potential Licensee’s revenue entitlement should costs and/or expenses arise in the event that the Potential Licensee has been required by the Secretary of State to increase the size of its security in respect of its decommissioning programme to account for the payment of VAT.

Any representations or objections to the proposed modifications must be made via email only due to the ongoing COVID-19 restrictions on or before midnight at the end of 4 February 2021.

For more information on offshore wind farms worldwide, click here. Alternatively, click here for our interactive map of offshore wind farms, infrastructure and ports.

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