Two government bodies are facing a stream of criticism over proposals to control the connection of offshore windfarms to the National Grid, The Times has learnt.
Ofgem, the energy regulator, and the Department of Trade and Industry (DTI) have been accused of putting forward plans that could lead to “stagnation” in the development of offshore renewable energy projects and could ultimately result in insufficient capacity to transmit electricity generated offshore back to the mainland.
The comments came after Ofgem and the DTI put forward two possible plans as part of a joint consultation on how to link offshore wind farms to the electricity network, ahead of an expected surge in activity by developers.
Under the first “nonexclusive” option, favoured by Ofgem, each development would trigger a competition between contractors to lay the cable connecting the proposed offshore development to the mainland.
The second “exclusive” option would see contractors compete at the outset to control all connections in a given area over a set period. Scottish and Southern Energy, which owns the UK’s largest wind farm, launched a scathing attack on the Government’s favoured options, arguing that neither of the proposals was desirable.
In a written response to the consultation, Rob McDonald, SSE’s director of regulation, argued that “both preferred options are overly complex and difficult to understand”.
He also questioned whether the costs and benefits of the proposals, and those of alternative options already ruled out, had been “clearly identified and quantified”.
He said that stagnation was possible under both options, with an increasing number of parties feeding into the electricity network potentially causing problems.
SSE’s concerns over complexity centre on the time it would take to set up tendering processes. It would also be necessary, Mr McDonald says, to review existing industry practices and governance procedures.
London Array, an offshore project backed by E.ON and Shell, has told Ofgem and the DTI that while it would choose the first option, it had concerns that a rejected proposal to allow offshore generators to create their own link to the National Grid had been “prematurely discounted”.
ScottishPower gave warning that Ofgem’s favoured proposal carried “a major risk” of duplication of connection cables. “In the worst case, this could jeopardise the viability of offshore renewable developments and result in a failure to meet the Government’s renewable targets,” it said.
RWE, which owns nPower, said Ofgem’s favoured option would prove a “higher administrative burden” for all parties.
Some respondents to the consultation also raised concerns about the uncertainty being faced by potential generators already in late stages of development about how any new regime would affect existing developments.
By Joe Bolger
19 February 2007
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