- Over £1bn transmission investment secured through Offshore regime to date
- European Investment Bank confirms support, providing half of debt funding
- Cost of running link for consumers a quarter less than previous projects
Ofgem has today appointed Blue Transmission London Array Limited as owners of the high voltage transmission link to the London Array (Phase 1) offshore wind farm. Four bidders competed to own and operate the £459 million transmission link, driving down the final cost for consumers.
The licence grant marks a key milestone for the world’s largest offshore wind farm and the competitive Offshore regime. The regime has led to the cost of running the transmission link being a quarter less than the seven previously completed licence grants. It has also attracted more than £1 billion of investment to the new Offshore transmission sector.
The Blue Transmission consortium comprising Barclays Infrastructure Funds Management Limited and a UK subsidiary of Mitsubishi Corporation will now maintain and operate the links for the next 20 years. Ofgem announced them as preferred bidders for the project in September 2012. Half of the debt funding for the purchase was provided by the European Investment Bank (EIB).
Lord Mogg, Ofgem Chairman, said: “This is a significant milestone. With a value of £459 million, these are the highest value assets to have been tendered under the offshore regime to date, bringing the total value of new investment attracted into the sector to over £1 billion.
“This competitive approach is also benefitting energy consumers. Running this link will cost consumers a quarter less than previous projects.
“I also welcome ongoing EU support through the European Investment Bank. Their financial support in terms of this project is a further endorsement of the competitive approach that is delivering offshore transmission investment.”
Jonathan Taylor, European Investment Bank Vice-President for the UK, said: “Investment in transmission projects is essential to link sources of renewable energy to the national grid. Today’s agreement brings total EIB support for the London Array scheme, the world’s largest offshore wind farm project, to more than £900 million and demonstrates the strength of the continued partnership with Ofgem. Over the last 5 years the European Investment Bank has provided more than £6 billion for long-term investment in the UK energy sector and is committed to supporting crucial energy investment across Europe.”