Ofgem launches tender for $4.67 billion (3.5 billion pounds sterling) Hornsea 3 transmission link

LONDON, Oct 21 — Ofgem on Oct 21 launched Tender Round 14 under its offshore transmission owner (OFTO) framework, in which investors will compete to own and operate the transmission assets connecting the Hornsea 3 offshore wind farm to Britain's power grid.

Ofgem said the round has an estimated value of around $4.67 billion (3.5 billion pounds sterling) and is expected to be its largest ever tender round. Hornsea 3 is located over 100 kilometres offshore in the North Sea and is due for completion by the end of 2027, according to Ofgem.

Under the OFTO regime, successful bidders receive an inflation-linked revenue stream for up to 25 years, subject to asset availability and performance. In return, they finance, operate and maintain prebuilt transmission assets, including cables and offshore and onshore substations. Ofgem said winning bidders have invested over $13.3 billion (10 billion pounds sterling) in links connecting 28 offshore wind farms since the regime launched in 2009. "By running a competitive process, Ofgem is helping attract the investment Britain needs for a cleaner, more secure energy system while making sure consumers get value for money," Beatrice Filkin, Ofgem's Director of Major Projects, said.