News story

Driving down the cost of offshore wind

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The competitive system for connecting offshore wind farms has been extended to drive down costs.

The competitive system for connecting offshore wind farms has been extended to drive down costs.

The offshore transmission regime has now ‘fully commenced’. The laws supporting the regime have taken full effect, meaning Ofgem can find the most cost-effective investment in the connecting cables and infrastructure for all offshore wind power.

Energy Minister Michael Fallon said:

“Driving down the costs of offshore wind is a priority to encourage investment in the sector, and will help keep the UK’s place as the best country in the world for offshore wind.”

Investors are now able to bid competitively to maintain and run the high voltage cables and infrastructure between offshore wind farms and the grid, making offshore wind less costly to develop. It also means that projects can move ahead at a faster pace and electricity can be brought onto the grid more quickly. Fifteen wind farms have so far been covered by the regime, which will produce over 4 GW, enough to power nearly 2.8 million homes.

The regime has also been expanded to give wind farm developers the option of asking a winning bidder to construct the transmission assets, as well as maintaining and running them. This means developers will not have to tie up their capital in connecting infrastructure and can plough their funds into constructing more offshore wind farms.

£1.4 billion of infrastructure investment has already been delivered and licensed, with another £1.5 billion in the tender process and billions more in the pipeline. The regime has tapped into new sources of investment, including pension funds.