Apart from a few hiccups during the global financial downturn, investor Warren Buffett has gained a reputation as a man who knows where to put his and his shareholders, money where the profits will follow. The news that Buffet is considering making a £1 billion investment in the UK green energy revolution has certainly created a bit of excitement in the world of energy.

The UK government have made no secret that they see Britain as the future world leader in offshore wind energy generation. However in order to harness the energy both for internal consumption but also for export to Europe, hundreds of miles of undersea cables to bring the electricity ashore will need to be laid.

This network of cables is expected to cost more than £12 billion to supply and place before the project is completed. In order to finance the operation, UK regulator Ofgem have launched a series of auctions for the rights to build and maintain the offshore wind energy infrastructure.

In the first phase of the project, investors have been invited to bid on the connections for nine offshore farms, some of which that have been built or are in construction or advanced planning stages. The wind farms are all situated off the coast at Kent.

Buffet’s company Mid-American Energy, having passed the the qualification stage, are expected to place a bid on the project to build and maintain the networks for the next twenty years.

Other candidates for the project include the UK National Grid, RWE, Scottish and Southern Energy, Macquarie, Transmission Capital and IFM. Other international competitors for the tender are Norway’s Statkraft, as well as Dong of Denmark.

The auction is expected to raise £1.15 billion, with two larger auctions covering future networks will be launched after next summer’s sales. In the meantime, Buffett is remaining non-committal on future participation.

financial

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Tags: Dong of Denmark, financial downturn, IFM, Macquarie, Mid-American Energy, offshore wind energy, Ofgem, RWE, Scottish and Southern Energy, Shareholders, Statkraft, Transmission Capital, UK government, UK green energy, UK National Grid, Warren Buffett