Regulatory regime for offshore electricity transmission

Ofgem consultation (52 pages, PDF) on the implementation of the DTI decision to adopt a non-exclusive tendering approach for licensing offshore electricity networks operating at 132kV and above.

The paper proposes that Ofgem (not the generators) would be responsible for determining the identity of offshore transmission network owners, using a PFI-style tendering process to be run in parallel with proposed offshore generators' applications to connect to the onshore distribution or transmission networks. Cost estimates offered by the successful offshore transmission network licence applicant would be used to set price controls intended to last for the life of the assets (no periodic reviews).

The offshore transmission network operators would levy these charges on National Grid's system operator business (rather than on generators), with the costs potentially shared across all onshore and offshore users in accordance with National Grid's transmission use of system charging policy. It seems that offshore network owners' entitlement to transmission network income would not depend on the continued operation of the offshore electricity generating plant that they connect.

Responses by Monday 30 April 2007.

Update, 3 April 2007: link changed to new version of the document, with at least some formatting changes; old version (51 pages, PDF).

For further information or advice please contact Franck Latrémolière.

Filed under DTI/BERR, Electricity, Ofgem.

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