Decision: OFTO extension and evolution of a mature asset class
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OFTO: further evolution of a mature asset class
Ofgem consults on the further evolution of the Offshore Transmission Owner (OFTO) regime as a mature asset class, building on more than a decade of operation since the first competitive tender round.
OFTO is the working model for competitive procurement of regulated transmission assets. Mature-asset-class evolution means tightening the process now that initial rounds are well past the learning curve. The questions in play: how much standardisation of revenue terms, how to handle asset transfers between OFTOs, and whether the regime extends to wider transmission build.
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OFTO: further evolution of a mature asset class | Ofgem
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OFTO: further evolution of a mature asset class
Publication type:
Consultation
Publication date:
14 July 2025
Last updated:
8 December 2025
Closed date:
9 September 2025
Status:
Closed (with decision)
Topic:
Offshore electricity transmission
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We are seeking views on High Voltage Direct Current ((HVDC) availability, control of Offshore Transmission Owner (OFTO) assets, changes to the Generator Commissioning Clause, and Bidder Incentive Mechanisms.
Details of outcome
In July 2025, we consulted on changes to the OFTO tender process, the availability target for HVDC assets, OFTO access and control, and potential options to incentivise bidders to finalise transactions more efficiently.
This consultation received 20 responses. This decision document sets out views we received from generators, OFTOs, industry representatives, and The Crown Estate. We have carefully considered all responses and set out our decisions on the matters raised.
Read the full outcome
OFTO: Further evolution of a mature asset class decision [PDF, 259.24KB]
Original consultation
The Offshore Electricity Transmission (OFTO) regime has operated steadily and successfully since 2012, delivering 27 offshore transmission assets to responsible owners through a competitive tender process that keeps costs down for consumers.
Since 2021, Ofgem has been engaging with stakeholders about a range of evolutionary changes aimed at ensuring the OFTO regime remains effective. This consultation follows conversations with stakeholders on:
early windfarms and OFTO assets reaching the end of the tender revenue stream
the duration and efficiency of the tender process in relation to the generator commissioning clause (GCC)
growth in the industry and technological advancements of assets
What we are consulting on
HVDC availability
Control of OFTO assets
Changes to the Generator Commissioning Clause
Bidder Incentive Mechanisms
Who should respond
People with an interest in offshore transmission, particularly developers, offshore transmission owners, investors and potential bidders. We also welcome responses from other stakeholders and the public.
Why your views matter
By responding to this consultation, you will help improve our understanding of stakeholders’ perspectives and inform our decisions on these issues.
Next steps
We will review all responses and will publish our decisions later this year. We may consult further on outstanding questions to supplement our understanding.
Main document
OFTO: Further Evolution of a Mature Asset Class [PDF, 303.74KB]
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8 December 2025 added outcome of consultation.
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Decision: OFTO extension and evolution of a mature asset class
Ofgem decision on OFTO extension and evolution of the mature asset class. Operative outcome of the December 2024 consultation.
Operative decisions on how the OFTO regime evolves as it matures. Sister to the July 2025 OFTO further-evolution consultation, the September 2025 licence modifications, and the February 2026 'Equipping OFTO for the future' work.
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Decision: OFTO extension and evolution of a mature asset class | Ofgem
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Decision: OFTO extension and evolution of a mature asset class
Publication type:
Decision
Publication date:
10 July 2025
Topic:
Offshore electricity transmission
Decision for:
OFTO: extension and evolution of a mature asset class
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In December 2024, we consulted on a number of issues relating to the End of Tender Revenue Stream ( EoTRS ) in order to finalise how we expect the offshore transmission regime to work, in practice, for projects nearing the end of the original tender period. These included questions on:
whether the availability target in the extension period should remain the same as in the original tender period
related requirements for the amount OFTOs should include within the performance reserve
our approach to partial and interim awards for investment works and Health Review costs;
risk sharing around early withdrawal for both generators and OFTOs
the resulting scope and review of Extension Revenue Stream ( ERS ) bids
We also asked questions on the length of the Tender Revenue Stream ( TRS ) and whether it should be extended past the current term of 25 years, and on extending the Generator Commissioning Clause ( GCC ) and the consequential impacts for the tender period.
This document covers the decisions that Ofgem has taken on EoTRS issues and the extension of the TRS, after carefully considering feedback from stakeholders to our December 2024 consultation.
Main document
Decision: OFTO extension and evolution of a Mature Asset Class [PDF, 178.48KB]
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Summary
Ofgem: OFTO: further evolution of a mature asset class; Decision: OFTO extension and evolution of a mature asset class