SHARED OFFSHORE INFRASTRUCTURE LICENSING SYSTEMS

1. Meaning and Regulatory Purpose

Shared offshore infrastructure licensing systems govern electricity assets used by more than one offshore generator, transmission project, or electricity market. Instead of every offshore wind farm constructing an entirely separate point-to-point connection to shore, coordinated networks can allow projects to share offshore substations, high-voltage cables, converter platforms, transmission corridors, or interconnector capacity.

In Great Britain, the traditional offshore transmission regime developed around individual radial connections. Government's Offshore Transmission Network Review recognised that continued reliance on separate connections could create unnecessary environmental, economic, and community impacts. The emerging framework therefore promotes coordinated offshore transmission and, where appropriate, shared infrastructure between multiple wind farms.

2. Electricity Act Licensing Framework

The principal statutory foundation is the Electricity Act 1989. Under sections 6–8, the Gas and Electricity Markets Authority (GEMA/Ofgem) may grant licences for activities including generation, transmission and interconnection.

An offshore transmission asset transporting electricity from offshore generation towards the onshore network will ordinarily fall within the transmission licensing framework. The Offshore Transmission Owner (OFTO) regime permits competitively appointed transmission owners to own and operate qualifying offshore transmission assets. Ofgem has stated that offshore transmission connects offshore wind farms to the onshore transmission network and continues to develop the OFTO regime as offshore deployment expands.

Shared infrastructure therefore requires clear allocation of ownership, operational control, access rights, maintenance obligations, charging arrangements and liability between participating generators and transmission operators.

3. Coordinated and Non-Radial Infrastructure

The Holistic Network Design introduced a more coordinated approach under which two or more offshore wind farms may share transmission infrastructure. Ofgem consequently distinguishes between radial offshore transmission and non-radial offshore transmission, with asset classification affecting the appropriate delivery and licensing model.

Licensing conditions must address issues including third-party access, network availability, capacity allocation, outage coordination, cost recovery and compliance with system-operation requirements.

A further development concerns Multi-Purpose Interconnectors (MPIs). These combine offshore wind connections with electricity interconnection between markets. In March 2026, Ofgem confirmed that government and Ofgem were pursuing offshore bidding zones with implicit trading arrangements as the preferred market model for MPIs.

4. Transmission Licence Exemptions

Not every offshore electrical asset necessarily requires a separate transmission licence. The Electricity (Class Exemptions from the Requirement for a Licence) (Amendment) Order 2024, which came into force on 16 August 2024, introduced an exemption relevant to high-voltage array systems connecting offshore wind farms to offshore substations.

Such exemptions help distinguish internal generation infrastructure from assets performing wider transmission functions.

5. Case Law

SSE Generation Ltd v Competition and Markets Authority [2022] EWCA Civ 1472

Facts: Electricity companies challenged regulatory decisions concerning transmission charging arrangements.

Legal Issue: The case required consideration of the Electricity Act licensing system, transmission licences and electricity-industry codes.

Judgment: The Court of Appeal examined the statutory powers of GEMA and the relationship between licences and industry codes.

Legal Principle/Ratio: Electricity transmission operates within a detailed statutory licensing framework in which licence conditions and approved industry codes have legally significant regulatory functions.

Significance: Shared offshore systems must therefore operate through properly authorised licences and applicable network codes rather than purely private infrastructure-sharing contracts.

Suffolk Energy Action Solutions SPV Ltd v Secretary of State for Energy Security and Net Zero [2024] EWCA Civ 277

Facts: The dispute concerned development consent for two offshore wind farms and associated shared-area onshore grid infrastructure.

Legal Issue: Whether the Secretary of State had lawfully authorised the projects under the Planning Act 2008.

Judgment: The Court of Appeal upheld the challenged development consent decisions.

Legal Principle/Ratio: Offshore generation and associated grid infrastructure must be assessed within the statutory planning framework, including their interconnected infrastructure effects.

Significance: Shared transmission licensing cannot be separated from planning and environmental consent requirements.

Ørsted West of Duddon Sands v HMRC [2026] UKSC 12

Facts: The dispute concerned expenditure incurred in developing offshore wind farms.

Legal Issue: Among other matters, the Court considered the physical and regulatory structure of offshore wind developments.

Judgment: The Supreme Court distinguished generation assets from transmission assets and described the extensive approvals necessary for offshore developments.

Legal Principle/Ratio: Offshore wind projects comprise legally distinct generation and transmission infrastructure requiring different regulatory treatment.

6. Conclusion

Shared offshore infrastructure licensing seeks to replace fragmented radial connections with coordinated, efficient and legally accountable offshore networks. The system combines Electricity Act licensing, OFTO regulation, asset classification, licence exemptions, planning consent, network codes and emerging MPI arrangements. As offshore networks become increasingly interconnected, licensing must clearly allocate ownership, access, charging, reliability and operational responsibility while preserving competition and system security.