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Home / News and Insights / Blogs / Planning Act 2008 / 889: New entrants win Crown Estate Round 4 windfarm awards

Today’s entry reports on this week’s announcement of the Crown Estate’s fourth round of offshore wind leases.

First, a bit of history. Back in 2001 the Crown Estate, which owns the seabed around the UK, issued a first round of leases of discrete areas to windfarm companies amounting to one gigawatt of potential electricity generation, for what were essentially demonstration projects. In 2003 a second round of leases were awarded for a further 7GW of capacity and in 2010 a third round approved a huge 32GW of capacity.

The original beneficiaries of Round 3, announced on 8 January 2010, were respectively EDP and SeaEnergy; SSE and Fluor; SSE, RWE, Statoil and Statkraft; Mainstream and Siemens; Scottish Power and Vattenfall; E.On; Eneco; RWE; and Centrica and RES. The owners and developers have changed considerably since then and are now SSE and Equinor (renamed from Statoil); Innogy; Ørsted; Scottish Power; Vattenfall; and E.On. Those contrasting lists exemplify the history of offshore wind in the UK.

11 years and one month after the Round 3 announcements, the Crown Estate announced its award of a fourth round of leases on 8 February, totalling 8GW. Perhaps surprisingly, none of the successful bidders is a current owner of a Round 3 project, although RWE snagged two new leases having originally been awarded one and a share of another last time.

There are six awards, three in the Irish Sea and three in the North Sea. A consortium of BP and Energie Baden-Württemburg (EnBW) gets two of the Irish Sea ones and a consortium of Cobra and Flotation Energy gets the third, smaller one. RWE gets two of the North Sea ones and a consortium of the Green Investment Group (a subsidiary of Australian investment group Macquarie) and Total gets the other.

I for one welcome our new offshore wind overlords. The latest awards could be seen as something of a turning point as two big oil companies (admittedly already investing in renewable energy) persuaded the Crown Estate of their credentials and outbid more established renewables companies to get a share of the market.

Has the Crown Estate done enough? Not all of the 32GW from Round 3 is proceeding: Navitus Bay was refused, nixing the 0.9GW from the ‘West of Isle of Wight’ Zone; upon receiving consent for Dogger Bank Teesside A&B in August 2015, Forewind abandoned Dogger Bank Teesside C&D and handed that part of the lease back to the Crown Estate, another 2.4GW lost. To reduce confusion (!), Dogger Bank Teeside A is now Dogger Bank C, and Dogger Bank Teeside B is now Sofia.

Despite that, and the government recently upping its 2030 target from 30GW to 40GW of offshore wind capacity, the Crown Estate has only awarded 8GW when you might have thought it would make up the 10GW increase. There are still to be Round 4 awards in Scotland, but unlike ‘The Crown’ there is to be no fifth season.

The successful Round 4 bidders are not entirely out of the woods – the projects will now undergo (plan level) habitats regulations assessment before the agreements for lease are finally signed off, and as can be seen from recent North Sea windfarm DCO decisions this is not a mere rubber-stamping exercise. The projects will still have to undergo HRA when they make their applications as well.

The prices some have paid for the privilege of securing leases have been high. The Crown Estate would say they are legally obliged to make as much money as possible excluding premiums arising from their monopoly position – have they done that? See s3(1) of the Crown Estate Act 1961, which says:

‘Save as provided by the following provisions of this Act, the Commissioners shall not sell, lease or otherwise dispose of any land of the Crown Estate, or any right or privilege over or in relation to any such land, except for the best consideration in money or money’s worth which in their opinion can reasonably be obtained, having regard to all the circumstances of the case but excluding any element of monopoly value attributable to the extent of the Crown’s ownership of comparable land.’

After only marginal progress in the 2010s, the march to net zero has accelerated dramatically in the last six months or so, and the pace only looks set to pick up further.

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