06 July 2008
Department for Innovation, Universities and Skills (DIUS)
 
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Offshore Transmission

Background

The Energy Act 2004 provides powers for the Secretary of State to put in place new regulatory arrangements for offshore electricity transmission. The development of offshore transmission is necessary to meet the requirements of new offshore wind farms and the next generation of renewables recognised in the Energy White Paper 2003: Our Energy Future - Creating a Low Carbon Economy.

These offshore generation projects are important to the Government's renewable energy targets and will be supported by the Renewables Obligation (RO). Once the new arrangements for regulation of the offshore network are in place it will be for the Office of the Gas and Electricity Markets (Ofgem) to administer and if necessary, modify or approve modifications, to these arrangements so that they remain fit for purpose.

BERR and Ofgem have undertaken two consultations to consider the high-level principles for the regulation of offshore transmission and the appropriate model for licencing offshore transmission connections.

Current Work

The Government has now published a response to the consultation: offshore Transmission - A Joint Ofgem/BERR Policy Statement July 2007 held last summer on the initial proposals for the licencing and regulatory framework that will apply to offshore electricity transmission networks. The document, published in January 2008, sets out decisions in a number of key areas concerning the competitive tender process and transitional arrangements and addresses the key concerns raised in the consultation responses.

Ofgem have published a further consultation document: Offshore Electricity Transmission - Regulatory Policy Update which sets out further thoughts and clarifications on the design of the offshore transmission regime.

On 14 February 2008 BERR and Ofgem published 'Modification of electricity transmission standard licence conditions - way forward document'. This document forms part of the consultation process jointly undertaken by the Government and Ofgem to establish a regulatory regime for offshore electricity transmission. It sets out a way forward for modifying electricity transmission licence conditions. It provides an overview of the proposed structure of the standard conditions in electricity transmission licences in order to accommodate new offshore electricity transmission licensees and sets out proposed modifications to standard conditions for offshore transmission licensees and the Great Britain System Operator. Responses are requested, by 13 March 2008, to offshoretransmission@ofgem.gov.uk  or offshore.transmission@berr.gsi.gov.uk

On 18 February 2008, BERR held an Offshore Wind and Transmission Investor Conference to highlight and explain in detail the proposals and significant investment opportunities relating to further competitive rounds for offshore windfarm sites (‘Round 3’) and the regulatory regime for offshore transmission. The conference was aimed at existing and potential investors in both offshore wind generation and related grid infrastructure.

On 6 June 2008 BERR and Ofgem released in advance draft Code and GBSQSS (Great Britain Security and Quality of Supply Standard) change proposals that form part of the next joint consultation on the offshore transmission regime. We considered that it would be helpful to provide interested parties with advance access to these proposals particularly given the length and complexity of the documents.  The documents are available on Ofgem’s website

On 13 June 2008 BERR and Ofgem published the full consultation document. This document sets out further proposals for the design of the competitive offshore transmission regime and consults on the licence and industry code changes that will be required to implement the new regime. It follows on from previous consultations and policy statements.

BERR / Ofgem are intending to hold an external communication session to discuss the consultation in more detail.  This will take place on Monday 7 July at 10am in

BERR Conference Centre
1 Victoria Street
London
SW1H 0ET

If you would like to reserve a place at this session, please send an email to offshore.transmission@berr.gsi.gov.uk

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