OFFSHORE GRID “MESHED NETWORK” REGULATORY FRAMEWORKS

1. Meaning and Regulatory Context

An offshore meshed network is a coordinated electricity transmission system in which multiple offshore wind farms, offshore substations, interconnectors and onshore transmission systems are connected through several interconnected links rather than by separate radial cables. It can allow electricity to move between different offshore generation sites and national electricity markets, improving network utilisation and potentially reducing the need for duplicated infrastructure.

In the UK, regulation has historically been based substantially on radial offshore transmission, with offshore wind farms connected individually to the onshore grid. The Offshore Transmission Network Review (OTNR) identified the environmental, economic and coordination problems associated with this approach and has promoted a more coordinated offshore transmission architecture.

2. Statutory and Institutional Framework

The principal legal foundation is the Electricity Act 1989, supported by Ofgem's licensing and regulatory powers. Offshore transmission generally requires an appropriate transmission licence, while interconnectors are separately regulated. This distinction becomes legally complicated where an asset simultaneously connects offshore generation and links different countries.

The UK subsequently created a statutory framework for multi-purpose interconnectors (MPIs) through the Energy Act 2023, establishing MPI operation as a licensable activity.

The principal institutions include:

• Ofgem – economic regulation, licensing, charging and compliance.
• NESO – strategic system planning and network design.
• Department for Energy Security and Net Zero – policy and legislative framework.
• The Crown Estate/Crown Estate Scotland – seabed leasing.
• Transmission operators and OFTOs – construction, ownership and operation of transmission assets.

Ofgem's recent classification work distinguishes onshore reinforcement, radial offshore transmission and non-radial offshore transmission, demonstrating the regulatory transition toward coordinated offshore networks.

3. Core Features of a Meshed-Network Regime

A comprehensive framework must regulate network planning, ownership, licensing, access, charging, balancing, congestion management and cross-border electricity flows. Particular importance attaches to defining who controls an offshore node or interconnector and who bears the costs of reinforcement.

Third-party access and non-discrimination are essential because multiple generators and market participants may depend upon the same offshore infrastructure. Ownership unbundling requirements also become important where transmission operators have relationships with generation or supply businesses. Ofgem has applied these principles in certification decisions involving OFTOs and interconnectors.

For hybrid offshore assets, market design must also determine whether electricity is treated through the home market or an offshore bidding zone. In March 2026, Ofgem confirmed that the Government and Ofgem are pursuing Offshore Bidding Zones with implicit trading arrangements as the preferred model for future MPIs.

4. Environmental and Planning Regulation

Meshed networks require integrated assessment of cumulative marine impacts. Cable corridors, offshore substations and landing points may affect marine habitats, fisheries, navigation and coastal communities. The current planning framework therefore emphasises early consideration of routing and environmental effects. National Policy Statement EN-5 (2025) specifically requires offshore transmission connection points to be considered as part of the overall offshore transmission network design.

5. Case Laws

Case 1: R (RWE Generation UK plc) v GEMA [2015] EWHC 2164 (Admin)

Facts: The dispute concerned Ofgem's approval of a methodology affecting electricity transmission charges.

Legal Issue: Whether the regulatory methodology was lawful and appropriately reflected statutory and regulatory requirements.

Judgment: The court examined the legality of GEMA's regulatory decision concerning transmission charging.

Legal Principle/Ratio: Economic regulators must exercise their statutory powers consistently with the governing legal framework and relevant regulatory objectives.

Significance: The case illustrates the importance of lawful transmission charging and cost-allocation methodologies, which become increasingly significant when several users share a meshed offshore network.

Case 2: R (SSE Generation Ltd) v CMA [2022] EWCA Civ 1472

Facts: The litigation concerned electricity transmission charging and the treatment of congestion-management costs.

Legal Issue: Whether the regulatory approach to transmission charges complied with the applicable legal framework.

Judgment: The Court of Appeal considered the limits of regulatory discretion and the requirement for lawful implementation of the transmission charging regime.

Legal Principle/Ratio: Regulatory expertise does not permit an authority to adopt an approach inconsistent with applicable law.

Significance: The principle is directly relevant to meshed networks because congestion, interconnection and shared transmission costs can produce complex allocation disputes.

6. Conclusion

The regulatory challenge of an offshore meshed network is fundamentally one of coordinating infrastructure that performs several functions simultaneously: offshore generation evacuation, transmission, interconnection and market integration. The emerging UK framework therefore moves beyond individual radial connections toward strategic network planning, non-radial transmission, MPI licensing, coordinated market arrangements, environmental assessment, ownership unbundling and transparent cost allocation. The OTNR and subsequent regulatory developments provide the foundation for this transition.