Ofgem releases Redpoint Energy report into offshore transmission

Ofgem releases Redpoint Energy report into offshore transmission

London, December 15, 2011 – The Office of Gas and Electricity Markets (Ofgem) has released a report looking into coordination in offshore transmission today.

The report by Redpoint Energy entitled ’Coordination in Offshore transmission – an assessment of regulatory, commercial and economic issues and options’, follows Ofgem’s commissioning of Redpoint to examine the regulatory framework, commercial arrangements and economic incentives for coordination in offshore transmission. Ofgem and the Department for Energy and Climate Change (DECC) are currently jointly undertaking an Offshore Transmission Coordination Project (OTCP) to consider whether additional measures are required to realise the potential benefits of a more coordinated approach to future offshore network connections.

The report presents an assessment of options for the regulatory and commercial regime for offshore transmission. In undertaking the work, Redpoint quantified the costs and benefits of coordination under a number of scenarios developed for Ofgem as part of the OTCP, and looked to assess the key potential barriers to developing a coordinated transmission network under the current arrangements. Redpoint then sought to identify the various types of risks to which consumers and industry are, or could be, exposed to in the development and operation of offshore generation and transmission and used this as a basis for developing a number of policy options to address the potential barriers that had been identified. The consultancy then developed and assessed illustrative policy packages through consideration and analysis of various intervention measures and their capacity to address the identified potential issues under the current regulatory framework.

Redpoint Energy director, Ilesh Patel, explains the need for the study: “Offshore generation is likely to be an important part of meeting Government renewable electricity targets. However, considerable uncertainty remains over the precise quantity and timing of offshore development, therefore we welcome the publication of our report into this vital issue. As stated in the report, a coordinated approach to developing transmission networks requires that expansion takes into account the full range of developments on the network, taking account of the benefits of and risks from coordination”.

‘Coordination in Offshore transmission’ follows a number of significant reports from Redpoint in Q4 2011, including investigation into the most appropriate uses for biomass in the UK for The Committee on Climate Change which was released earlier in December.