Advisory Services for OFTO-Build Model Development in Non-Radial Offshore Transmission

About

Ofgem awarded a contract to CEPA LLP for advisory services to support the development of an OFTO-build model for non-radial offshore transmission infrastructure.

The work involved in-depth analysis of party roles, responsibilities, and risk allocation, including sub-categories of risk; analysis of financing options to secure the best possible finance at the lowest cost to consumers, determining availability of construction finance, evaluating market appetite for a new class of assets compared to existing classes, and considering consumer benefits from refinancing including claw-back mechanisms.

CEPA LLP provided advice on designing a process to incentivise timely delivery for OFTOs, considering reward and risk, and on elements of the tender process such as optimal timing, duration, and adjustments to the existing OFTO model.

The contract also covered advice on treatment of the Tender Revenue Stream (TRS), adjustments to revenue structures for shared infrastructure, and potential changes to Codes and Standards and other industry arrangements.

The contract value was AUD 376,290.