Re: Let the madness begin!!!@Phil O'Sophical
"It's another instance of some naïve bright spark thinking up a cunning plan to get private investors to finance infrastructure, without having the wit to realise that the more complex you make the scheme, the easier it will be for the not-so-naïve investors to find loopholes. This sort of scheme wil only ever attract subsidy farmers."
Not quite. The article isn't absolutely clear, but this isn't PFI, because the government never intended to own the asset, directly or indirectly (other than for their dead flesh, control freak approach to the electricity industry as a whole).
The origins of this mess are that OFGEM (plus DECC & govt) decided in their wisdom that when building offshore wind, the land connection was an expense that could usefully be shared, and in the civil servant's mind this scheme was to reduce the overall cost, and encourage sharing of the land connections by wind farm constructors. To ensure that there was no dog in the manger attitudes, the wind farm operators are specifcially NOT allowed to build and own their own grid connection to shore. So OFGEM and DECC came up with the bizarre concept of offshore transmission system operators, complete with their own micro-regulatory environment, and as a result it has sucked in scumbucket City investment firms who know a laughably profitable deal when they see one. Your suggestion of "let a private company build and lease it to the wind farm operator" is essentially how the scheme now operates, and that's exactly what doesn't work, because there's neither effective competition, nor the wind farm operator's interest in seeing the job done in house at the lowest cost.
OFGEM could have made it work better in one of two simple ways: One, make National Grid responsible for all the offshore transmission connections, as they are on land. Or two, make the wind farm builders pay for, construct and own the transmission link as far as the shore.
But then again, when did either DECC or OFGEM do anything well, or simply? You're right that these schemes aren't viable, full stop. The only way wind farms can operate is a whole range of subsidies, both direct financial ones, tax ones, "carbon" ones, and in particular "must run" status in the merit order.