Ofgem has launched a tender for the offshore transmission assets connecting the Hornsea 3 offshore wind farm to the UK electricity grid. Hornsea 3 is under construction in the North Sea, more than 100 kilometres offshore. The project is scheduled for completion by the end of 2027 and is expected to generate enough electricity to power 3.3 million UK homes.
Under the OFTO framework, successful bidders finance, operate and maintain the transmission infrastructure, including cables and offshore and onshore substations. The assets are built before ownership is transferred to the successful bidder. The framework provides investors with a long-term, inflation-linked revenue stream. Ofgem uses a competitive tender process to limit costs for consumers and maintain performance standards. The 14th round of the Offshore Transmission Owner (OFTO) tender programme is expected to be the largest to date, with an estimated value of £3.5 billion.
