Barclays/Macquarie frontrunner for UK’s biggest offshore transmission link

Ofgem has appointed the consortium, which also includes Frontier Power and Macquarie Capital, as preferred bidder to own and operate the high voltage link to the London Array (Phase 1) wind farm. The contract is worth £428m.

A consortium of Barclays Infrastructure Funds Management, Mitsubishi Corporation, Macquarie Capital and Frontier Power have been appointed by UK energy regulator Ofgem as preferred bidder to own and operate the UK’s largest offshore transmission project so far.

Macquarie Capital also acted as financial adviser to the group.

The consortium, known as Blue Transmission, will, if successful, become offshore transmission owner (OFTO) for the 630-megawatt London Array (Phase 1) wind farm, located in the Thames Estuary. Blue Transmission already manages the offshore transmission link to the Walney I Wind Farm, located off the Cumbrian coast. Walney I consists of 51, 3.6-megawatt wind turbine generators.

At an estimated £428 million (€533 million; $694 million), the link to London Array (Phase 1) is the largest offshore transmission project to have reached the preferred bidder stage, according to Ofgem.  

Robert Hull, Ofgem E-Serve managing director, commercial called it a “significant milestone for the offshore regime.” He added that “competitive tendering for the ownership of offshore power links is attracting new investment into the Great Britain energy sector at a time of tough financial market conditions”.

The reserve bidder for the project is a Balfour Beatty/Equitix consortium.

The London Array (Phase 1) wind farm is owned by a consortium of Dong Energy, E.ON and Masdar.

The wind farm link is one of four projects in the second Ofgem tender round to connect1.8-gigawatts of offshore wind farms, with total transmission assets valued at £1.3 billion. The other three are projects Lincs, Gwynt-y-Mor and West of Duddon Sands.

Ofgem will soon be launching a tender for the transmission link to the 389-megawatt West of Duddon Sands project, which has an approximate value of £255 million. The pre-qualification stage is due to commence towards the end of this year.

The Gwynt-y-Mor offshore wind farm link is estimated to be worth £306 million, with the tender process for it due to start in the next couple of months, according to Ofgem.