The consultation sets out further information on the enduring offshore transmission regime, building in particular on Ofgem's December 2011 consultation on tender exercises under the enduring regime. In particular, it sets out Ofgem's minded-to positions and further proposals in relation to tender exercises under the enduring regime for both Generator and Offshore Transmission Owner (OFTO) build options. Ofgem will use its minded-to positions to revise the Electricity (Competitive Tenders for Offshore Transmission Licences) Regulations 2010 by the end of 2012.
Enduring Tender Exercises
Ofgem states that under the Generator build option, the tender exercises under the enduring regime will be similar to the approach taken under the transitional regime with minor changes such as the need for additional flexibility in running the Qualification to Tender (QTT) stage.
In relation to the OFTO build option, generators have requested further information in relation to potential refinements. In addition, Ofgem has seen increasing interest from generators, the supply chain, funding market and sponsors in relation to this build option. Ofgem considers that there is good evidence that the parties to be involved in OFTO build tender exercises would have the financial standing and delivery capability to deliver generation capacity to the benefit of consumers.
As a consequence, Ofgem confirms that OFTOs will be responsible for the detailed design and procurement in addition to construction, operation and decommissioning of transmission assets. Ofgem recognises that OFTO build tender exercises will require close cooperation between Ofgem and generators.
Policy proposals on OFTO licence changes
In its consultation, Ofgem also set out policy proposals on potential improvements to the enduring licence and related aspects of the commercial framework. The proposals include potential enhancements to the availability incentive under both build options. Responses to the consultation will inform Ofgem on revision of the OFTO licence for the enduring regime, which will be undertaken during 2012 and early 2013.
Phased and/or staged projects
Ofgem set out its proposed approach to running tender exercises for phased and/or staged projects in its December 2011 consultation. In setting out the findings of analysis undertaken by Ofgem and its external technical advisers on the impacts of its baseline approach for tendering large phased and/or staged projects (such as some Crown Estate Round 3 projects), Ofgem has proposed a set of principles for treating staged and phased projects under the enduring regime.
Other policy development areas
In addition to the above proposals, Ofgem intends to develop specific policy areas such as duration of the revenue stream, approach to refinancing gains, and revenue stream indexation.
The consultation is open until Tuesday 17 July 2012.