The tender for new onshore electricity transmission infrastructure projects worth £100 million or more will mean the transmission companies – National Grid Electricity Transmission, Scottish Hydro Electricity Transmission, and Scottish Power Transmission – will have to compete against other firms for the right to build and own new, high-value transmission assets.
Since 2009 links to offshore wind farms have been competitively tendered, and Ofgem estimates that this has saved consumers between £200 million and £400 million so far. Now, Ofgem wants to apply the formula to new onshore electricity transmission infrastructure.
Chief executive Dermot Nolan said: “Part of our role is to ensure that customers pay no more for energy infrastructure than they have to. We took a ground-breaking approach by opening up ownership of offshore links to competition and now we are going further.
“In future we will tender out high-value electricity infrastructure projects onshore. This ensures that customers get even better value for money from Britain’s grids.”
Ofgem is now consulting on the detail of how onshore tendering would work, including how eligible projects would be identified and the revenue that winning bidders would receive from operating the links.
The consultation will close on 11 January 2016.