Crown Estate signs lease agreements for six new British offshore wind farms totalling 8GW

Image: Dogger Bank

The organisation’s newesr lease agreements are the culmination of the Crown Estate’s fourth Leasing Round for offshore wind, held in August 2022. Under the leases, developers gain exclusive rights for wind farm development in their location. Developers agree to rent the respective plot of seabed for a maximum of ten years. The Crown Estate receives an annual option fee from each project developer in the meantime, with sums determined by the developers themselves. These fees are paid to the Treasury.

With these agreements in place, project developers are able to further plans for their sites. They will still need to apply for a development consent order from the Government, for both the wind farm and the cable connection onshore. They will also need to apply to connect to the electricity network. After this, they will need to apply to the Contracts for Difference (CfD) auction scheme to bid for support to build and run the wind farm before construction begins.

The six sites for which the Crown Estate has signed agreements for today (19 January) include Dogger Bank South’s West and East extensions, managed by RWE renewables. Collectively, the two extensions to the wind farm off the Yorkshire coast will add 3GW of generation capacity.

Also supported are the 1.5GW Outer Dowsing project off the Lincolnshire coast; the 1.5GW Mona project off the coast in northern Wales; the 480MW Morecambe project off the Lancashire coast and the 1.5GW Morgan wind farm off the coast of Barrow-In-Furness. Ministers of the UK Government and Welsh Government have welcomed the news.

Collectively, the businesses and consortia developing the six wind farms have committed around £1bn per year to them. The Crown Estate has argued that this is a sign of “confidence in the UK’s world-leading offshore wind sector and Government’s commitment to grow the low-carbon economy”.

To this point, the Energy Security Strategy last year increased the UK’s offshore wind capacity target for 2030 from 40GW to 50GW. The most recent Renewable Energy Country Attractiveness Index (RECAI) from EY ranked the UK as the world’s third most attractive clean energy investment market, behind only China and the US. There are concerns that this position may slip temporarily in the future as renewables developers face a new price cap implemented in response to the energy price crisis.

In any case, the Crown Estate’s managing director of marine Gus Jaspert said today’s announcement marks “a significant milestone for the UK on the road to net-zero”.

He said: “I’d like to thank all those who have collaborated with us on this leasing round to ensure the UK continues to lead the way in rebalancing energy provision away from fossil fuels for the benefit of present and future generations,” adding that it is important to “realise the potential of the seabed” for biodiversity as well as for renewable energy.

The Crown Estate is preparing to launch a programme of work to ensure environmental compensation when wind farms are developed in protected sites such as the Dogger Bank Special Area of Conservation and the Flamborough and Filey Coast Special Protection Area. It will establish a steering group for each site, bringing together policymakers, regulators, nature conservation bodies and the relevant project developers.

RSPB has warned that this may not be sufficient. The NGO’s director of conservation, Katie-jo Luxton, said: “Untested compensation schemes for nature, with no guarantee of success, are not a substitute for a planning system that avoids sensitive areas in the first place. Our seabird populations are struggling, and we are still counting the potentially massive cost of the ongoing Avian Influenza outbreak to our globally important colonies.

“There is a clear willingness in the energy sector, The Crown Estate and the governments of the UK to find answers that avoid harming wildlife. But until we have a comprehensive plan for the next decade and beyond, we are stuck in a cycle of schemes that come with avoidable problems for nature.”

Removing permitting barriers

The announcement from the Crown Estate is timely, given that, earlier this week, the Energy Transitions Commission (ETC) published a new briefing on the importance of “dramatically” streamlining the planning and permitting process for wind and solar projects in meeting global climate goals.

According to the briefing, the increase in global wind and solar capacity will need to be five to seven times higher in 2030 than it is at present, if sectors such as transport and heat are to be electrified in line with the net-zero transition and the electricity to serve them predominantly hailing from renewable sources.

The briefing reveals that, in the UK, offshore wind project development timelines have averaged 12 years to date. It sets out “simple” measures that it claims could reduce this average by more than 50%, to 5.5 years. The measures could be applied in markets other than the UK, as well.

First and foremost, nations will need to set clearer targets for power sector decarbonisation. The UK has already done this, setting a 2035 goal for ending unabated gas-fired electricity generation.

Building on this sort of top-level pledge which sets the direction of travel, the paper recommends, nations should assign priority status to renewables, dedicating more land and enforcing streamlined permitting targets. It calls for the digitisation of the permitting process to save time, plus measures to limit legal challenges to projects which can cause costly delays. It also calls for an end to understaffed permitting departments.

Beyond changing regulations, governments will need to provide better permitting advice to developers and will need to modernise nationwide development planning using digital mapping tools and data tools.  They will also need to improve stakeholder engagement and implement measures to ensure that the benefits of wind farms are shared with local communities.

These measures would also benefit onshore wind and solar developers, the briefing emphasises. It states that the average onshore wind development in Spain so far has taken ten years to complete, with the timeline standing at four years for utility-scale solar in France. Respectively, these could be reduced to 4.5 years and one year, the ETC claims.

A range of business members of the ETC contributed to the report, including BP, Iberdrola, Orsted, Shell and National Grid. Additionally, SSE has praised the report for “helpfully highlighting good practice” and “setting out clear recommendations”.

SSE’s chief executive Alistair Phillips-Davies said: “While it is good to see the UK recognised as a world leader, to maintain this status we need to accelerate rapidly the pace at which we are now building low-carbon infrastructure – not only in terms of renewables but strategic investment in electricity networks and flexible technologies that will help balance and lower the cost of a net-zero power system.”