CMA Dismisses RWE Appeal on Offshore Transmission Cost Rule CMP344

The Competition and Markets Authority on 19 October dismissed an appeal by Gwynt y Môr Offshore Wind Farm and two RWE companies against Ofgem's May decision to reject CMP344. Costs were reserved.

CMP344 would have kept the cost of approved Income Adjusting Events, such as uninsurable cable defects on offshore transmission assets, in the demand residual paid by consumers. Under current rules those costs are passed back to the connected generator through its offshore local charges.

The CMA rejected all four grounds, including a claim of apparent bias because the Ofgem decision-maker had earlier opposed the proposal while working for NESO.

On figures the appellants supplied, the effect was about £0.06/MWh on a £91/MWh CfD strike price. By our estimate that is roughly £210,000 a year for a 1 GW wind farm. The full analysis covers the method and the CMA's reasoning.

RWE raised the proposal in May 2020.