Offshore Transmission

The Renewable Energy Strategy Consultation published in June 2008 set out the Government’s proposals for a ten-fold increase in our use of renewable energy. The UK has access to substantial onshore and offshore wind resources and, as relatively mature technologies, we expect them to play a large part in delivering the planned expansion.

At present there is very little electricity network infrastructure installed offshore. DECC and Ofgem are working jointly to develop a new regulatory regime for offshore electricity transmission to connect significant amounts of renewable offshore generation to the GB onshore grid. The aim is for the new regime to ‘Go Active’ in June 2009 and ‘Go Live’ a year later (currently planned for June 2010).

The Energy Act 2004 provides the powers for the Secretary of State to put in place the new regulatory arrangements for offshore electricity transmission. 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. These offshore generation projects are important to the Government's renewable energy targets and will be supported by the Renewables Obligation (RO).

As part of the offshore transmission project, DECC and Ofgem have undertaken a series of consultations to develop the high-level principles and proposals for implementation of the regulatory regime and the appropriate model for licensing offshore transmission connections.

Consultations to Date

In January 2008 the Government published a response to the consultation: offshore Transmission - A Joint Ofgem/BERR Policy Statement July 2007 which was held in summer 2007 on the initial proposals for the licensing and regulatory framework that will apply to offshore electricity transmission networks. This set out decisions in a number of key areas concerning the competitive tender process and transitional arrangements and addressed the key concerns raised in the consultation responses.

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

In February 2008 BERR and Ofgem published 'Modification of electricity transmission standard licence conditions - way forward document'. As part of the consultation process this document set out a way forward for modifying electricity transmission licence conditions. It provided an overview of the proposed structure of the standard conditions in electricity transmission licences in order to accommodate new offshore electricity transmission licensees and set out proposed modifications to standard conditions for offshore transmission licensees and the Great Britain System Operator.

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 draft Code and GBSQSS (Great Britain Security and Quality of Supply Standard) change proposals in advance of the next joint consultation on the offshore transmission regime. 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.

On 7 July 2008, BERR and Ofgem held a stakeholder communication event to explain our proposals for a competitive offshore transmission regime and the licence and industry code changes associated with the new regime. The slides from the presentation and notes from the question and answer sessions are below.

On 6 October 2008, Ofgem published a consultation document on the competitive tender process for the new offshore electricity transmission regulatory regime. The document seeks comments on proposals for running tenders in the transitional regime as well as further thoughts on how tenders in the enduring regime might differ. It contains further detail on the stages in the tender process, Ofgem's proposed selection and evaluation strategy as well as key activities which will be required ahead of a tender round commencing. The consultation also includes draft Pre-Qualification and Invitation to Tender documents for comment. The documents are available on Ofgem's website.

The deadline for responses is 14 November 2008.

Further information on all the consultations to date is available on the Offshore Transmission: Consultations webpage.

Further Consultations

We intend to hold the final consultation on the full package of proposals for the offshore transmission regulatory regime in early 2009.

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