Mitsubishi Corporation (MC) is pleased to announce the acquisition of a new offshore electricity transmission asset in the UK. With this asset, MC will commence electricity transmission from London Array, the world’s largest offshore wind farm, to the UK’s onshore transmission grid.

 

Blue Transmission London Array Limited (Blue Transmission), an entity incorporated by a consortium formed between Diamond UK Transmission Corporation Limited (DUTC), a UK-based MC subsidiary, and Barclays Infrastructure Funds Management (BIF), has been granted the Offshore Transmission Owner License by the Office of Gas and Electricity Markets (Ofgem), the UK regulators. The license allows Blue Transmission to own and operate the transmission system for 20 years. Blue Transmission was advised by Macquarie Capital acting as financial adviser.

 

Valued at GBP 460 million (approximately JPY 70 billion), the transmission system will link the London Array wind farm, located in the outer Thames Estuary approximately 20km off the south east coast of the UK, with the onshore grid at Kent.

 

Starting with the Walney-1 transmission asset in November 2011, MC has been increasing its participation in the electricity transmission sector across Europe, with other acquisitions including Walney-2 in October 2012 and Sheringham Shoal in July 2013, both in the UK. MC has also entered the electricity transmission business in Germany, having acquired BorWin-1/2 in December 2012 and DolWin-2/HelWin-2 in April of this year.

 

With the acquisition of the London Array asset, MC now owns and operates a total of 8 assets in Europe, 4 each in the UK and Germany, bringing its gross transmission length to 900km and its capacity to 4GW.

 

In accordance with this growth in the electricity transmission business, MC established a new subsidiary, Diamond Transmission Corporation Limited (DTC), in the UK in 2011. All assets in Europe will be consolidated under DTC, which will allow for improved efficiency in the management of assets across the continent.

 

Some 50GW of offshore wind power capacity is expected to be developed in Europe by 2020. Drawing on the know-how obtained from current operations in the UK and Germany, MC will seek further involvement in this sector with a view to contributing to the provision of stable power transmission systems, particularly in Europe where power generation through renewable sources is on the rise. The renewable energy thrust is also expected to gain ground in North America and Asia in the near future, and MC’s approach going forward will be to also tap into those markets as they develop.

 

This approach is consistent with “New Strategic Direction”, the company’s recently released corporate strategy, under which MC is seeking to double net profits from non-resource business areas and to create a more diversified portfolio in line with a long-term vision to create multiple sizable “winning businesses”.

Reference Information

 

Project	Transmission Length	Transmission Capacity	Status	Partner
UK	Walney-1	48km	180MW	In Operation	BIF
	Walney-2	48km	180MW	In Operation	BIF
	Sheringham Shoal	45km	320MW	In Operation	BIF
	London Array	55km	630MW	In Operation	BIF
GERMANY	BorWin-1	200km	400MW	In Operation	TenneT
	BorWin-2	200km	800MW	Under Construction	TenneT
	DorWin-2	135km	900MW	Under Construction	TenneT
	HelWin-2	135km	690MW	Under Construction	TenneT

 

Barclays Infrastructure Funds is a funds management business that has been operating since 1996. It focuses on investment in social infrastructure projects in the UK and continental Europe and energy projects with a similar risk and return profile. BIF has raised six funds from institutional investors with total funds currently under management of about £1 billion. BIF operates through Barclays Infrastructure Funds Management Limited (“BIFML”) which is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is registered in England No. 06949026 with its registered office at 1 Churchill Place, LONDON E14 5HP. BIFML is a Barclays Bank PLC company.