Macquarie, INPP, Balfour shortlisted for £1bn transmission deal

In its second round of offshore wind transmission tenders, Ofgem shortlisted bidders including Balfour Beatty, International Public Partnerships, and a consortium comprised of Macquarie Capital, Barclays Infrastructure, and Mitsubishi.

Ofgem has shortlisted four consortia to own and operate transmission lines worth £1.1 billion (€1.24 billion; $1.81 billion), the UK's electricity and gas regulator said in a statement.

The winning bidder will own the transmission lines to the Gwynt y Môr, Lincs, and London Array wind farms on the UK's eastern and western coasts under a 20-year contract, Ofgem said.

The four shortlisted consortia are:

–    Balfour Beatty Equitix, which is comprised of Balfour Beatty Capital, the equity investment arm of UK developer Balfour Beatty, and UK-based social infrastructure manager Equitix;
–    Blue Transmission, which is comprised of Macquarie Capital Group, Barclays Infrastructure Funds Management, and Mitsubishi Corporation;
–    National Grid Offshore, which is part of London- and New York-listed power company National Grid;
–    A consortium comprised of UK-based transmission company Transmission Capital Partners (TCP) and London-listed infrastructure fund International Public Partnerships (INPP)

Ofgem expects to select preferred bidders for transmission lines to the Lincs and London Array projects by this autumn. Ofgem did not specify when it would select a preferred bidder for the Gwynt y Môr project, as construction on that project is less advanced.

Last August, Ofgem awarded contracts to own and operate the first round of transmission lines, which connected to seven offshore projects.  The total value of the transmission lines was estimated to be about £700 million, and the projects attracted £4 billion worth of “investment appetite”, according to a statement.

Ofgem selected a consortium that included Macquarie, NIBC Infrastructure and Barclays Private Equity to own an operate three of the seven offshore projects. A consortium comprised of TCP, INPP and Amber Infrastructure Group won another three, and Balfour Beatty won one.

In October, Ofgem also selected TCP and INPP to operate the £100 million, 150-megawatt Ormonde wind farm in Northwest England.

The offshore licensing regime was introduced in 2009, and Ofgem said it expects the regime to save £350 million relative to onshore transmission costs.