Ofgem has confirmed that the Gwynt y Mor OFTO suffered an ‘income adjusting event’ when it was out of action for five months while the cable it operates – which connects the Gwynt Y Mor offshore wind farm to the onshore network – was under repair. The OFTO’s income and performance measurement should be adjusted accordingly. In February Ofgem acted urgently at the company’s request to make a similar judgement, because the OFTO warned that it was in danger of being unable to fund cable repairs. It took that decision with regard to the first two months of the outage.
The cable went into outage on 15 October 2020 and was not restored until 7 March 2021.
In the past, claims that offshore service interruptions be treated as an ‘income adjusting event’ – ie beyond the control of the licensee OFTO – have been made after the cable involved has returned to service. But last year Gwynt y Mor OFTO had already been examining potential and actual faults in its cables that were likely to lead to outages and it told Ofgem in October 2020 that “it would face significant financial difficulties funding any further cable repairs”. This was “primarily as a result of the financial consequences of the cable repairs it had to fund in 2015.” The OFTO asked Ofgem to speed its decisions on exceptional event claims, to help restore its financial headroom and show that it was not likely to be liable for the lost availability.
The licensee’s plea to Ofgem came because it had found faults in and around the fibre optic cables (FOCs) that run through its cables alongside the power transmission cores. Ofgem says, “At that time, the Licensee was aware of the FOC issues .. albeit it was unaware that the main power core was close to failure.”
That main power core failed on 15 October.
With little financial headroom , the OFTO submitted a claim to Ofgem for the period to end December 2020, before the cable returned to service at the end of March. In February Ofgem agreed that “it is more likely than not that the initial (FOC) break led to the second FOC break, which subsequently led to the failure of the main power cable. Based on the evidence available and submitted to date, we consider that it is likely that the Transmission Services Reduction is the result of the failure of the spare FOC either due to an inherent defect, and/or an issue that arose as a result of a previous repair on the FOC.”
The regulator has confirmed that view in the second claim for the January-March period.

Further reading
Moody’s downgrades Gwynt y Mor OFTO to Baa1, saying uncertain cable repair costs will drain reserves

Gwynt y Mor OFTO reveals battle to insure offshore wind cables: 40% premium hike and scores of providers decline