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Ofgem rejects income adjusting event claim for Gwynt y Môr cables

4C Offshore | Bridget Randall-Smith
By: Bridget Randall-Smith 15/06/2020 Ofgem
Ofgem announce final decision that 2015 cable failure at the Gwynt y Môr Offshore Wind Farm does not qualify as an income adjusting event.

Located 8 miles from the North Wales coast in Liverpool Bay,  the 576 MW offshore wind farm was built and operated  by Innogy with partners Stadtwerke München and Macquarie Infrastructure and Green Investment Group. The project has been operational since 2015.


Gwynt-y-Môr OFTO plc, a consortium of Balfour Beatty and Equitix, acquired the transmission assets for the 576 MW Gwynt y Môr offshore wind farm in 2015, through the Offshore transmission owner (OFTO) regime.

Two cable failure events were recorded in March and September 2015 caused by damage to the polyethylene sheath of the fibre optic cable which enabled seawater to penetrate through to the inner wires.  It was determined that the damage was caused by "manufacturing defects or poor operating practice in laying and/or storing the cable" which manifested over several months. Extensive and costly repair works were required in the region of £14.2 million and shouldered by the OFTO.


The OFTO considered that the cable failure and the consequential costs were not reasonably foreseeable and that it should not be liable as the damage likely occurred prior to the hand-over of the transmission assets. The OFTO applied to Ofgem for an IAE in June 2016.


In September 2017 Ofgem determined that the event does in part constitute an IAE. However, this was
quashed by London High Court in April 2020. The developers argued that the OFTO could have mitigated the risk through maintenance contracts, insurance and pre-contract due diligence. Lord Justice Philips’ ruled that the developer was not held liable for the repair costs of the failed export cables as there was no evidence that damage was incurred during the six-day hand-over period. The case was then remitted back to Ofgem for reconsideration.

On 10th June Ofgem revised its original decision concluding that the cable failure event does not constitute an IAE.

"We do not consider that the risk of the Cable Failure was unforeseeable or exceptional, and we consider that the Licensee was in a position to manage the risk of the Cable Failure (irrespective of whether it in fact took all such steps). Accordingly, we find that the Cable Failure does not constitute an IAE"


For more information on offshore wind farms worldwide, click here.

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