Britain's energy regulator Ofgem and the Department of Energy and Climate Change have published a report showing how more coordination in the development of offshore links and infrastructure can be achieved. In tandem, Ofgem has launched a consultation on potential changes to the regulatory regime for offshore transmission assets to take some of this work forward.

The government’s Renewable Energy Roadmap suggests that by 2020, between 11 and 18 GW of wind farm capacity could be built off Britain’s coast, compared to 1.6 GW now. Future wind farms will be substantially larger and further offshore than existing projects. Instead of building individual connections for each development, they could be interlinked to lower the overall construction and operating costs. This would mean the offshore network could grow incrementally and efficiently.

This coordinated approach could reduce the cost of offshore connections by 8-15% (£0.5-3.5 billion). This would help meet the government’s target of reducing the cost of offshore wind to £100 per MWh by 2020. It could also pave the way for an offshore network in the North Sea linking wind farms off Britain’s coast to other European countries.

Robert Hull, Managing Director, Commercial, Ofgem E-Serve, said: “Competitive tendering for the ownership of offshore power links is attracting new investment into the GB energy sector and saving customers money. We want to continue making savings, which is why coordinating links, where this can increase efficiency, is so important. We consider we can do this in a way that protects customers while providing stability and certainty for wind farm investors and prospective offshore transmission owners.”

The measures are intended to clarify how coordination can be achieved. Ofgem would assess whether anticipatory investment is beneficial to the development of an efficient network. Approval would also depend on other factors. For example, developers and the system operator would have to show that there is demand for capacity to be built, and that there is a robust benefits case for customers.
In time, these changes could potentially be adapted to also help the development of a European offshore network if this does materialize.