Engineering giant teams up with Equitix to reach financial close for key offshore wind transmission link
Balfour Beatty has announced its consortium with Equitix has reached financial close for the £162.9m Humber Gateway offshore transmission project (OFTO), strengthening the infrastructure giant's position in the fast-expanding offshore grid market.
The announcement came on the same day as Ofgem confirmed it has granted the consortium a license to operate the high voltage link to the Humber Gateway wind farm for the next 20 years.
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The link connects E.ON's 219MW offshore wind farm in the North Sea, eight kilometres from the east Yorkshire coast, to the onshore transmission grid. The 73 turbines are capable of generating enough electricity for around 170,000 homes each year.
Under the terms of the deal, the Balfour Beatty Equitix Consortium will own and operate the offshore transmission link for the next 20 years, while Balfour Beatty's Power Transmission and Distribution business will be responsible for the operation and maintenance of the OFTO's assets, including one offshore and one onshore substation and two cable circuits consisting of 18 kilometres of subsea and 30 kilometres of land cable.
Ian Rylatt, Balfour Beatty Investments chief executive, said the move underlined the company's interest in the growing market for offshore wind farm connections.
"This is our fourth OFTO contract to reach financial close and further establishes our position in the offshore transmission market," he said in a statement. "Our technical expertise ensures we can efficiently and effectively, support the government's targets to meet more of the UK's energy needs through renewable sources."
Hugh Crossley, Equitix's Chief Investment Officer, said: "Equitix's commitment to the offshore transmission market is testament to our investors' appetite for long term, availability-based, inflation-linked, UK infrastructure."
The license follows the announcement in September 2015 that Balfour Beatty Equitix was awarded preferred bidder status by Ofgem to own and operate the Humber Gateway offshore transmission link.
Following the financial close, Balfour Beatty will invest £12.5m of the total required equity of £21m. In addition, the European Investment Bank is providing an £82m 19 year loan for the Humber Gateway OFTO. Financing provided by the European Investment Bank represents nearly 50 per cent of eligible project costs and the long-term EIB loan is alongside senior debt provided by three commercial banks, the companies said.
The news comes just days after Business and Energy Secretary Greg Clark gave planning approval for the transmission links for the planned Triton Knoll project in the North Sea.
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