Ofgem has awarded a licence to the Diamond Transmission Partners consortium to own and operate the grid assets at the 1200MW Hornsea 1 offshore wind farm off the east coast of England.
Diamond Transmission Partners, a partnership between Japanese industrial group Mitsubishi Corporation and Chubu Electric Power, secured the licence with a record £1.2bn investment, according to Ofgem.
Hornsea 1 Limited, a joint venture owned by Orsted (50%) and Global Infrastructure Partners (GIP) (50%), signed the agreement for the sale of the assets to Diamond Transmission Partners.
Orsted will provide the owner of the transmission assets with operations and maintenance services under a long-term agreement.
Under Ofgem’s regulatory framework, bidders compete to buy transmission links from offshore wind farm developers.
In return the winning bidder receives a guaranteed level of income which is set by Ofgem for running the link for up to 25 years.
Ofgem has awarded 21 licences through this process, with a total of £5.7bn being invested in grid links for 7.8GW of offshore wind capacity.
Ofgem deputy director for commercial and assurance Rebecca Barnett said: “Today’s record investment demonstrates the appetite of global investors to support the UK’s transition to net zero emissions.
“Ofgem’s regulatory framework ensures that this investment can be attracted at the lowest possible cost, saving consumers hundreds of millions of pounds on their energy bills.”