With the Government recently announcing the offshore transmission network review, this Chart of the Week takes a look at the recent trends in the OFTO tender process.
The OFTO regime was established in 2009 by the Government and Ofgem. In many countries, responsibility for constructing and operating offshore electricity transmission assets falls to either the windfarm developer or to the onshore transmission owner (TO). In the UK, separate Offshore Transmission Owners (OFTOs), which are neither the windfarm developers nor the onshore TOs, take responsibility for the assets under long term licences (20 years previously, now 25 years). The licence guarantees revenues over the lifetime of the assets subject to certain conditions such as performance obligations. Therefore, OFTOs represent an investment opportunity in a defined type of asset supported by an underlying regulatory regime.