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UK government to grant OFTO exemptions due to COVID-19 delays

By: Bridget Randall-Smith 24/06/2020 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/892078/notice-proposed-transmission-licence-exemptions-offshore-windfarm-operators-covid-impacts.pdf

Cables General Windfarms

The UK government is proposing an exemption order for wind farm generators in tender rounds 5 and 6 of the offshore transmission owner (OFTO) regime, who have been affected by COVID-19 and are currently in the process of transferring assets between the wind farm developer and new OFTO company.

In the UK developers/owners are allowed to own and operate the transmission systems for 18 months without a transmission license but after this ownership must be transferred to an OFTO company selected by Ofgem.

The tender process for wind farms in tender rounds 5 and 6 is already impacted, and is expected to be further impacted, by COVID-19 in the following ways:
• The lack of available personnel due to the pandemic;
• Restricted movement of people during “lockdown”;
• Financial uncertainty; and
• The cumulative, knock on impacts of COVID-19; and
• Potential for ongoing disruption to normal working practices and uncertainty about how
long COVID-19 related impacts will continue.

The government are proposing to grant time limited exemptions of between 3 and 12 months depending on the impact COVID-19 is likely to have on each project. The exemptions are being proposed on the basis that the delays caused by COVID-19 constitute exceptional circumstances.

Projects to be affected include:
• 400.2MW Rampion wind farm located in the English Channel, 13km –17.2/20km off the West Sussex coast, consisting of 116 of 3.45MW turbines. RWE (50.1%), Macquarie (25%), Enbridge (24.9%).
• 588 MW Beatrice wind farm located in the Moray Firth, 13km – 24km off the Sarclet coast in Caithness, consisting of 84 of 7MW turbines. SSE (40%), PensionDanmark (35%), SDIC (25%).
• 1.2GW Hornsea One wind farm located in the Southern North Sea, 120km from the Humber Estuary shore in East Yorkshire,consisting of 174 of 7MW turbines. Ørsted (50%), Global Infrastructure Partners (50%).
• 714 MW East Anglia ONE wind farm located in the Southern North Sea, 48.3km – 63.1km off the Suffolk coast, consisting of 102 of 7MW turbines. Iberdrola (60%), Macquarie (40%).

Beatrice’s 18-month commissioning period is due to end on 2nd October 2020. Transmission Capital Partners were selected as the preferred OFTO bidder in December 2019. The effects of social distancing measures and restrictions of movement on Beatrice have been a barrier to reaching a crucial milestone in working toward transfer. This is likely to have further knock on impacts on future milestones if, for example windows of good weather are missed this year. There is uncertainty around how long Beatrice will continue to be affected and additionally, if it will be affected in the lead up to the October transfer due to financial uncertainty.

Rampion has an existing exemption which expires on 27th November 2020 with the transmission assets due to be handed over to Transmission Capital Partners. Rampion is experiencing delays due to the reduced availability of contractors, personnel and parts, suppliers from third parties and infection of individuals contributing to the development of the transfer. Works which were due to commence toward the beginning of “lockdown” have been delayed. As with all the projects, financial uncertainty is also considered a risk.

Hornsea One’s 18-month commissioning period ends on 14th January 2021. The cumulative impacts of decreased personnel availability and disruption to normal working practices during the “lockdown” period and accounting for future amended working practices in the near term and knock on impacts of any delays to other projects with deadlines prior to Hornsea One, can be expected to have a significant but uncertain impact on the timetable for transfer. Preferred OFTO bidder Diamond Transmission Corporation (DTC) does not expect any delays to the transfer process but Hornsea One and the government still wish to implement an extension.

East Anglia ONE's 18-month commissioning period ends on 13th September 2021. The invitation to tender (ITT) process is already delayed by at least two months and this is anticipated to materially increase the risk that the generator may not complete the transfer by the deadline.

The government considers that the Hornsea One, Rampion and Beatrice projects are likely to be unable to complete the transfer of transmission assets within commissioning period and propose a 12 month extension. The government also propose a three month extension for East Anglia ONE due to delays to the tender process and a likely knock on effect to the transfer of assets. A consultation on the proposals closes on 10th July.

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

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UK government to grant OFTO exemptions due to COVID-19 delays

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