Winning bids announced for £700m UK wind projects

Balfour Beatty Capital and consortia led by Macquarie Capital and Transmission Capital Partners have been selected as preferred bidders for £700m of transmission links for seven offshore UK wind farms.

Three parties have been selected as preferred bidders to own and operate the first £700 million (€842 million; $1.1 billion) of transmission links to seven offshore UK wind farms, following a tender process run by energy regulator Ofgem.

The transmission links for the seven projects will connect 2 gigawatts of offshore wind capacity. The contracts offer the right to own and operate the high-voltage transmission links in exchange for a 20-year regulated revenue stream.   

The three winners are: Balfour Beatty Capital, the equity investment arm of UK developer Balfour Beatty; a consortium led by Australia’s Macquarie Capital which includes the UK’s Barclays Private Equity and NIBC Infrastructure Partners, the infrastructure investment arm of Dutch bank NIBC; and a consortium led by UK-based transmission company Transmission Capital which includes Amber Infrastructure, the UK infrastructure investment firm that span out of Babcock & Brown last year.

The Macquarie Capital consortium has been awarded three projects: Sheringham Shoal (£182.2 million, 315MW); Walney 1 (£101.8 million, 178MW); and Walney 2 (£105.0 million, 183MW). The Transmission Capital consortium also has three: Barrow (£36.5 million, 90MW); Gunfleet Sands 1&2 (£48.2 million, 164MW); and Robin Rigg (£57.3 million, 180MW). Balfour Beatty Capital has been awarded the £163.1 million, 300MW Thanet project.

Other shortlisted bidders for the seven projects were: Denmark’s DONG Energy Sales and Distribution; Green Energy Transmission, a consortium of UK infrastructure investor Equitix and Australia’s AMP Capital Investors; and National Grid Offshore, the offshore arm of the UK power transmission network.

In all, Ofgem is tendering nine transmission links worth £1.1 billion. The remaining two projects are the 150MW Ormonde project worth £101.1 million and the 504MW Greater Gabbard project worth £316.6 million. The same three winning bidders for the first seven projects have been selected to submit best and final offers (BAFOs) for Ormonde.  Meanwhile, the invitation to tender for Greater Gabbard is being re-run as a single concession rather than the two that were originally planned.

In a press release, Ofgem said there had been £4 billion of “total investment appetite” for the projects including offers of commitment from equity, corporate finance and commercial debt finance providers and European Investment Bank funds. “Many of the projects have received commitment offers over and above the required funding envelope, demonstrating the attractiveness of the investments,” it said.

Ofgem estimates that the tenders will deliver savings of £18 million per annum, or £350 million over 20 years, relative to the existing onshore monopoly regime.