Ofgem has awarded a licence for the grid link to offshore windfarm Hornsea One after securing a record £1.2 billion investment.
The Mitsubishi Corporation-led consortium Diamond Transmission Partners was selected by Ofgem to own and operate the offshore transmission system linking the windfarm to the British mainland.
Built by Orsted the 1.2GW offshore windfarm, which is currently the world’s largest, can deliver enough electricity to power more than 1 million homes.
Under the regulatory framework, bidders compete to buy grid links from the windfarm developer. In return the winning bidder receives a guaranteed level of income which is set by Ofgem for running the link for up to 25 years.
The regulator has awarded 21 licences through this process, with a total of £5.7 billion being invested in grid links for 7.8GW of offshore wind capacity.
Ofgem added that the first 15 licences alone have delivered at least £700 million in savings to consumers.
Rebecca Barnett, deputy director for commercial and assurance at Ofgem, said: “Today’s record investment demonstrates the appetite of global investors to support the UK’s transition to net zero emissions.
“Ofgem’s regulatory framework ensures that this investment can be attracted at the lowest possible cost, saving consumers hundreds of millions of pounds on their energy bills.”