LONDON - British energy regulator Ofgem has announced a shortlist of six bidders competing to connect nine offshore wind projects to the grid in the first stage of a programme to connect up some 33 gigawatts (GW) by 2020.
The first stage will connect up to 2 GW of renewable electricity, enough to power about 2 million homes. The winners are to be announced in May 2010.
Ofgem said on Monday the links were worth over 1 billion pounds ($1.6 billion) and that the first round had attracted strong competition, with shortlisted bidders including new entrants to the transmission markets such as Balfour Beatty and Macquarie.
Two of Britain's established transmission companies did not fare so well, however, with Scottish & Southern not making the final cut, while National Grid is on the shortlist for just two of the nine projects.
It is the first phase of a 15 billion pound programme to ensure links to offshore wind farms. Britain is adding to its offshore wind farms in its effort to source about a third of its electricity from renewable sources.
The strong competition for the first round of transmission links demonstrates the value of attracting new entrants and shows that firms have confidence in the tendering process and are willing to make a substantial investment, Ofgem Chief Executive Alistair Buchanan said in a statement.
Four energy firms had pulled out of the process last month, with sources saying they did not find the structure of the scheme attractive or did not wish to separate generation from supply.
The regulator said it expected continued interest from new entrants in a second tender process, due to begin next summer.
The European Investment Bank was considering making over 300 million pounds available for the first tender phase, it added.
If Britain is to meet its climate change targets and secure energy supplies Ofgem's Project Discovery estimates that up to 200 billion pounds may need to be invested, Buchanan said.
The Crown Estate, which owns the seabed 12 nautical miles off the British coast, plans to announce this year winners for Round 3 offshore wind programme for 25 gigawatts, which requires investment possibly as much as 100 billion pounds. The shortlisted firms are:
Balfour Beatty Capital
DONG Energy Sales and Distribution
Green Energy Transmission -- a consortium of Equitix and AMP Capital Investors
Macquarie Capital Group
National Grid Offshore
Transmission Capital Partners -- a consortium of Transmission Capital, International Public Partnerships and Amber Infrastructure Group
Projects in the first stage include the 504 MW Greater Gabbard wind farm offshore Suffolk, being developed by Scottish & Southern Energy and RWE, and the 300 MW Thanet project offshore Kent being developed by Vattenfall.
Shares in National Grid were up 0.6 percent at 649 pence at 1045 GMT, Balfour Beatty was up 0.2 percent and Scottish and Southern was up 0.4 pct, while the FTSE 100 was up 0.9 percent.
(Reporting by Victoria Bryan, Nao Nakanishi; editing by William Hardy)