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November 27, 2013

Greater Gabbard wind farm receives offshore transmission licence from Ofgem

Greater Gabbard OFTO, owned by Balfour Beatty Investments, Equitix and AMP Capital Investors, has received a £317m (€380.7m) offshore transmission licence from UK energy regulator Ofgem for the Greater Gabbard offshore wind farm.

By admin-demo

Offshore Wind

Greater Gabbard OFTO, owned by Balfour Beatty Investments, Equitix and AMP Capital Investors, has received a £317m (€380.7m) offshore transmission licence from UK energy regulator Ofgem for the Greater Gabbard offshore wind farm.

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The licence will enable Greater Gabbard OFTO to own and operate the transmission link to the 500MW offshore wind power project.

The Greater Gabbard offshore transmission owner (OFTO) project, a high-voltage transmission system, connects the wind farm off the coast of Suffolk to the onshore transmission grid.

The transmission assets feature two offshore substation platforms and an onshore substation. The offshore connection points are located on the two offshore platforms, located within the boundaries of the project.

The transmission project, which is the first OFTO project to be funded through capital markets, is claimed to be the first UK project to make use of the EIB Project Bond Credit Enhancement (PBCE) product.

The PBCE product, which reduces the investment risk, enables infrastructure projects including the Greater Gabbard OFTO to attract additional private finance from institutional investors, such as insurance companies and pensions funds.

Greater Gabbard OFTO has been appointed by Ofgem to assume ownership of the link from Greater Gabbard Offshore Winds, jointly owned by SSE renewables and RWE npower renewables.

"The project features 140 3.6MW Siemens wind turbines and can generate enough clean energy to power around 530,000 homes."

Ofgem E-Serve managing director Robert Hull said the deal offers further evidence of the benefits to consumers of opening up the offshore transmission market to competition.

Hull said: "We are delighted our tender has enabled the first project in the UK to utilise the EIB’s PBCE product, confirming the OFTO regime’s status as an established infrastructure asset class.

"The offshore regime has now secured more than £1.4bn of investment to date, leading to benefits to consumers through the competitive regime."

The developer Greater Gabbard Offshore Winds started construction of the Greater Gabbard wind power project in 2008 and inaugurated it in August 2013.

The project features 140 3.6MW Siemens wind turbines and can generate enough clean energy to power around 530,000 homes.

Earlier in 2008, Siemens Energy was awarded a €800m contract to supply wind turbinesm along with a five-year service and warranty agreement.


Image: Ofgem grants offshore transmission licence to Greater Gabbard OFTO. Photo: courtesy of RWE.

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Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
by GlobalData
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