A consortium comprising Mitsubishi Corporation and HICL Infrastructure has been appointed preferred bidder to own and operate the £1.2bn (€1.42bn) high voltage transmission connection link serving the Hornsea 2 offshore UK wind farm.

UK energy regulator Ofgem said Diamond Transmission Partners has been selected to own and operate the asset for the next 24 years.

Hornsea 2, owned by Danish energy firm Ørsted, AXA IM Alts and Crédit Agricole, is located 89km from the Yorkshire coast and has a capacity of 1320MW.

Ofgem said the initial estimated value of the transmission assets is £1.19bn. When the final value of the assets has been agreed by Ofgem, the preferred bidder will pay the final amount to Ørsted, once they have been granted the assets offshore transmission owners (OFTO) licence by Ofgem.

Akshay Kaul, Ofgem interim director of infrastructure and security of supply, said: “Connecting offshore wind farms such as Hornsea 2 to Great Britain’s electricity transmission network helps harness the power of North Sea wind to deliver renewable energy supplies to British consumers.

“The competitive OFTO regime helps ensure this is done at the least possible cost to consumers.”

The reserve bidder for the Hornsea 2 project is Transmission Capital Partners. The reserve bidder may replace the preferred bidder if it fails to successfully complete the tender process.

HICL, the InfraRed Capital Partners-managed London-listed infrastructure fund, said the consideration for HICL’s 75% share of the economic interest in the Hornsea II OFTO is expected to represent approximately 3% of HICL’s £3.94bn portfolio, by value.

HICL also said it has acquired a 45.75% shareholding in Texas Nevada Transmission (TNT) in the US, from Manulife Investment Management and John Hancock entities.

Through TNT, HICL is acquiring a 45.75% indirect shareholding in Cross Texas Transmission (CTT) and a 45.75% indirect shareholding in Great Basin Transmission South (GBTS). 

HICL said LS Power has significant indirect shareholdings in both CTT and GBTS

Following completion of the transaction, TNT will represent approximately 6% of HICL’s portfolio, by value.

Edward Hunt, the head of core income funds at InfraRed Capital Partners, said: “TNT delivers long-term predictable income under-regulated and contracted frameworks while supplying an essential utility, bolstering network resilience and enabling the transition to renewable energy sources in the states of Texas and Nevada.

”This acquisition fits firmly within HICL’s vision to support sustainable modern economies and is another example of InfraRed’s international footprint and network enabling HICL to execute its strategic priorities.” 

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