The Crown Estate awards UK offshore wind energy sites

Not everyone was happy with the awarding of The Crown Estate. Associations like WindEurope and RenewableUK as well as global market leader Ørsted expressed criticism: too little land was awarded for the great ambitions that the British government had recently announced. In addition, the leasing round introduced a new bidding system where investors have to pay an 'option fee' in advance for the right to develop projects. This 'option fee' must be paid annually until companies receive the final planning approval they need to then bid in the Contracts for Difference (CfD) auction. The planning process can take up to 10 years.

However, there was also joy among the companies that emerged as winners from the award. Among them is a consortium including German energy supplier EnBW and bp. The two companies are now planning two offshore wind farms in the Irish Sea with a total capacity of three gigawatts, which are to go into operation from 2028 and will be able to supply around 3.4 million households with electricity.

“Our bids prevailed for the most attractive areas in the auction that stand out for above average wind conditions and favourable prospects in terms of approval,” said Dirk Güsewell, head of renewable energy portfolio development at EnBW. “We have already been able to put in an advance grid connection application. The combination of the two areas right next to each other also means wide-ranging synergies in planning, construction and operation going forward. All of these factors have a positive impact on the asset value of the planned wind farms.”

RWE was also pleased to be awarded a contract. The two neighbouring sites have a total potential capacity of 3,000 MW and are located on Dogger Bank, a sandbank in a shallow area of the North Sea, 110 kilometres from the north-east coast of England. Nearby, RWE is already developing Sofia, another offshore wind project on the Dogger Bank. The average price to lease the sites the company won was £82,552 per MW per year, the lowest winning price in the auction.

The joint venture between Macquarie's Green Investment Group (GIG) and Total has also successfully secured rights in the Crown Estate's Offshore Wind Leasing Round 4. The project, located off the UK coast of East Anglia, could provide up to 1.5GW of renewable electricity. Currently, the two companies are already working together in South Korea to jointly develop a large portfolio of floating offshore wind projects.

“Total is delighted to have been awarded 1.5 GW as part of the 4th Round of offshore wind leases from The Crown Estate with our partner GIG. We continue to support the energy transition goals of the UK. This project is our largest renewables development in Europe to date and an important step toward our 2050 net zero ambition”, said Julien Pouget, Senior Vice President Renewables at Total.“ The joint venture won this lease for an annual option fee of £83k per MW/year during the development phase.

The latest project went to Offshore Wind Limited, a joint venture between Cobra Instalaciones y Servicios, S.A. and Flotation Energy plc and is located off the coast of Lancashire, west of Blackpool and southwest of Morecambe Bay on the UK's northwest coast.

UK Energy Minister, Anne-Marie Trevelyan said: “The UK is a world leader in offshore wind energy, with the Prime Minister’s Ten Point Plan laying out a bold ambition to produce enough offshore wind to power every home in the UK. Energy delivered by the new offshore wind projects in The Crown Estate’s latest leasing round will help power seven million homes, driving forward our commitments to eliminate the UK’s contribution to carbon emissions by 2050, creating thousands of new jobs and ensuring Britain builds back greener.”