As part of the ongoing implementation of the Energy Act 2004, and following a joint Ofgem/DTI consultation last year, the Government announced on 29 March 2007 that the licensing of offshore electricity transmission will be subject to competition. Under the new 'non-exclusive' system, Britain's monopoly electricity transmission network owners will have the opportunity to compete against a wider range of transmission companies to build, own and maintain the links.
David Gray, Ofgem's Managing Director for Networks has said that the new competitive arrangements will benefit both consumers and offshore renewable generators by putting downward pressure on prices and delivery times.
Ofgem's scoping document, published on 30 March, focuses on the design of offshore transmission price controls and the changes which are likely to be necessary to the electricity licences and industry codes. The document sets out key policy questions, outlines initial thoughts on the proposed processes and provides a detailed framework for the work that needs to be undertaken.
Responses from interested parties were due on 30 April and it will be interesting to see how the proposals have been received by both the monopoly electricity transmission network owners and other potential transmission licensees, particularly in relation to proposals such as extending price controls to the lifetime of assets as opposed to undertaking regular reviews. It will also be interesting to discover if those parties already constructing assets feel that they have been given sufficient certainty by proposals relating to adoption of those assets by incoming transmission licensees on implementation of the new regulatory regime.