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Crown Estate confirms changes to controversial offshore wind auction plans

Matt Cook's picture
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  • Jul 22, 2019
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The tender for seabeds is to be refined after concerns raised by leading energy businesses. After mounting criticism of the recent plans for the biggest offshore wind auction in years, the Queen’s property manager has confirmed the plan will be modified to enable fairer terms for renewable energy businesses.

The Crown Estate has the rights to seabeds surrounding the British Isles recent informed wind farm developers that it would alter controversial plans for the tender to ensure it was more affordable to develop renewable energy. The Crown will generate record sums of money directly from the offshore wind market by auctioning off the seabed to leading energy businesses. Plans have been delayed slightly, however, due to the initial plans being criticised for their ‘high cost’ approach. The Guardian recently revealed that the auction plans would generate hundreds of millions for the Queen and at the same time raise energy bills for the public. The Queen’s estate had proposed an alternative to standard tender rounds, requesting businesses to compete for projects by submitting sealed envelope bids, a process that was heavily criticised by energy companies, stating this would lead to higher wind subsidies and ultimately raise the energy costs for households. 

Due to rising pressure, the Crown Estate announced it would make the tender process more transparent by implementing daily bidding cycles, avoiding the industry fear of it being an uncontrolled auction. The Crown also confirmed they would remove the initial payment and replace with annual payments over a three year period. Jonny Boston, the business development manager at the Crown Estate explained that after lengthy consultation and feedback from the market they decided to refine the tender design. Boston highlights that their goal is to create an attractive, accessible and fair tender process that will enable the sustainable development of the seabed and generate new projects that support the UK’s transition towards a low carbon economy.

The Crown Estate currently charges the equivalent of 2% of revenues for using its seabed and received over £40 million from current leases in the last year. This figure is expected to rise considerably as further offshore wind projects emerge. The seabed currently generates around 8% of total electricity in the UK but under new government targets, this could expand considerably.

Industry trade association RenewableUK has welcomed the changes to the tender process and highlights that it is essential for the leasing process for offshore wind development supports our future targets and at the same time provides customer value.

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Matt Chester's picture
Matt Chester on Jul 22, 2019

Is this a type of problem that's arisen in other offshore projects, or are parts of this unique because of the Crown's involvement?

Matt Cook's picture
Thank Matt for the Post!
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