Wind-Power Projects May Stall on U.K. Grid Regulation

April 29 (Bloomberg) -- A U.K. plan to install more than 8,000 offshore wind turbines by 2020 may be delayed by a government plan to contract out work to connect the wind farms to the grid, according to Centrica Plc and E.ON AG.

Regulator Ofgem has said allowing competitive bids would attract investors to the industry and curb the 15 billion-pound ($23 billion) cost of connecting 33,000 megawatts of capacity over the decade. Wind-power producers contend that awarding the work exclusively to other companies, who may lack expertise in offshore wind, could slow projects.

“We don’t want to build a generation asset and then be beholden to a transmission company -- and we don’t know who that’s going to be -- in getting our power to shore,” Sarwjit Sambhi, managing director of power generation at Centrica, said by telephone. The Windsor, England-based utility runs three offshore wind farms, has another slated for construction this year and a permit to erect more turbines in the Irish Sea.

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The offshore network will be an “incredibly complex piece of engineering, and unless companies have the right incentives to coordinate and anticipate development then consumers will pay the cost of inefficient network designs,” Freeman said by phone. “Instead of building point-to-point connections right out into the North Sea, we need a more coordinated regime.”

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