Ofgem has shortlisted four potential operators for its next OFTO (Offshore Transmission Owner) bidding round for three offshore transmission links worth an estimated £2bn.
A new bidder has joined three others in a competition to own and operate up to three offshore wind farm transmission assets, in the most valuable OFTO tender round ever run by Ofgem.
A consortium led by newcomers Gravis Capital Partners joins previous OFTO bidders EKITD Consortium, Diamond Transmission Partners and Transmission Capital Partners.
The four would-be OFTOs have all successfully passed through the “Enhanced Pre-Qualification” (EPQ) stage.
This is the first hurdle for aspiring OFTOs, whereby they must demonstrate that they are capable of both paying for and operating the OFTO assets which form part of the tenth tender round.
All four bidders will be able to bid for the three offshore transmission assets of Dogger Bank A Offshore Wind Farm, Neart na Gaiothe Offshore Wind Farm and Moray Offshore Wind Farm (West), estimated to be worth a combined total of around £2bn.
They will now go through to the final Invitation to Tender (ITT) stage for each of the assets.
The ITT stage for the Dogger Bank A project is due to begin imminently and will be staggered thereafter for the remaining two projects, with Ofgem appointing a preferred bidder for each link after its respective ITT stage.
The OFTO for each project will receive a guaranteed revenue stream for up to 25 years under the terms of their licence, subject to the availability of their assets.
Ofgem Director of Networks Rebecca Barnett said: “Many investors are looking for green, sustainable investments that offer a steady, index-linked income – this is exactly what OFTOs provide.
“With a stream of multibillion pound OFTO assets coming to market over the next few years there are many opportunities for more investors and consortia to come forward and get involved.”
Ofgem’s Tender Round 10 announcement follows the recent transaction close of OFTO Tender Round 8.
Diamond Transmission Partners, a consortium comprising Mitsubishi Corporation and HICL Infrastructure plc, was selected by Ofgem in September 2022 as the preferred bidder to own and operate the Hornsea Two OFTO asset for the next 24 years.