EIB examines over £300m of funding for connecting offshore wind farms

The funding will be available for 6 offshore wind farm projects totalling around 1.6 GW, which mark the start of an expansion of offshore wind power generation to help meet the UK’s emissions reduction targets.

The Department for Energy and Climate Change (DECC) and Ofgem E-Serve have put in place competitive arrangements to ensure offshore wind generators benefit from cost effective connections to the mainland electricity network. Those firms competing to run connections to these six offshore wind projects can now apply to the EIB for funding.

Ofgem’s Chairman Lord Mogg says: “By adopting a competitive process for connections Ofgem E-Serve is endeavouring to keep the cost of connection to generators as low as possible. This brings benefits to consumers, who will ultimately fund the £15 billion required to connect the 33 GW of offshore generation needed to help meet Britain’s emission targets.

“Ofgem’s recent review of the challenges Britain faces in securing energy supplies and achieving climate change targets has shown that investment in offshore wind could play a vital role in helping Britain meet its climate change targets and in reducing its dependence on imported gas.”

UK Minister of Energy Lord Hunt, adds: “The EIB’s support will be very welcome. Connecting offshore wind farms to the grid quickly and cost-effectively will be crucial to tackling climate change and securing our future energy supplies. This money would help projects currently under construction get their cables in the water and feeding into the grid quickly and cheaply.”

Ofgem E-Serve has already shortlisted 13 offshore wind firms as bidders to run the connections for the first phase of the drive to connect up offshore wind farms, known as the transitional regime:

  1. ABN Amro Infrastructure Capital Management
  2. Balfour Beatty Capital
  3. DONG Energy Sales and Distribution
  4. Equitix (a consortium of Equitix and AMP)
  5. ESB International
  6. Frontier Power Consortium (a consortium of Frontier Power and Infracapital Partners)
  7. Imera
  8. Macquarie Capital Group
  9. National Grid Offshore
  10. RWE Npower
  11. SSE Offshore Transmission
  12.  A consortium of Stakraft UK and StatoilHydro UK Holdings
  13. Transmission Capital Partners (a consortium of International Public Partnerships, Transmission Capital and Amber Infrastructure)

As part of this tender process firms will be competing to own and run offshore wind farm transmission links for 9 projects, 6 of which (see below) will be eligible for funding from the EIB.

Project Wind farm developer(s) MW Expected completion date
1. Sheringham Shoal StatoilHydro, Statkraft 315 Qi 11
2. Ormonde Vattenfall 150 July 11
3. Greater Gabbard SSE/Airtricity, RWE Innogy 504 Mar 11
4. Thanet Vattenfall 300 Oct 10
5. Walney 1 DONG Energy 178 Apr 11
6. Walney 2 DONG Energy 183 Oct 11
Total 1630

The present round of tenders is known as the transitional regime and open the way for transmission licensees to own and operate transmission assets for offshore renewable projects which have been or are being constructed. A second transitional tender process is scheduled to begin next year.