Balfour Beatty said this is its first offshore transmission investment as part of the offshore transmission owner (OFTO) tender regime run by the non-ministerial government department Office of Gas and Electricity Markets (Ofgem). OFTO covers wind and tide based offshore projects around the entire offshore area for the UK.
A consortium has been formed that is comprised of Balfour Beatty Investments, Equitix and AMP Capital, with each company holding a one third share of the project. One third of the required equity of GBP46m will be invested by Balfour Beatty, which will jointly own the OFTO assets and be responsible for their operation and maintenance under a long-term licence granted by Ofgem with a 20-year revenue entitlement.
The Greater Gabbard project is a high-voltage transmission system connecting the 504MW Greater Gabbard Wind Farm to the onshore transmission grid. Greater Gabbard is located off the coast of Suffolk and is expected to generate enough electricity to power around 500,000 homes annually. Included in the OFTO assets are two offshore and one onshore substation and over 150km of sub-sea cable infrastructure.
In addition, Balfour Beatty stated that it has been awarded preferred bidder status on three OFTO projects by Ofgem to date, making Balfour Beatty the leading investor position in this market. The company anticipates that the GBP163m Thanet OFTO and the GBP346m Gwynt y Mor OFTO will close in 2014. Balfour Beatty is also shortlisted for the West of Duddon Sands OFTO to be awarded in the first half of 2014. Ofgem’s OFTO regime is expected to present further opportunities with a total capital value up to GBP8bn through to 2020. Two of these projects are slated for 2014.