19 September 2019

The Crown Estate launches the UK’s first major offshore wind leasing round in a decade, opening up the opportunity for at least 7GW of new clean energy

The Crown Estate has today launched Offshore Wind Leasing Round 4, opening up the potential for at least 7 GW of new seabed rights for offshore wind development in the waters around England and Wales - enough to meet the electricity needs of over six million homes.

The Crown Estate, which acts as manager of the seabed around England, Wales and Northern Ireland, is making four broad areas of seabed available to the market, within which potential developers will have the opportunity to bid for project sites.

Today’s launch follows over 18 months of engagement with the market and stakeholders through which The Crown Estate has developed and refined its proposals.

Huub den Rooijen, Director of Energy, Minerals and Infrastructure at the Crown Estate said:

“The UK is home to the world’s largest offshore wind market, attracting global investment, meeting UK electricity needs, and playing a crucial role in the transition to a net zero economy. 

“Leasing Round 4 is the next chapter in this remarkable transition, developed and refined through extensive engagement with the market and stakeholders, to deliver an attractive, fair, objective process, which helps to balance a range of interests in the marine environment.

“Round 4 projects will take the UK sector from strength to strength, delivering clean, affordable, home-grown electricity and joining a robust pipeline of projects in UK waters, which together will deliver a fourfold increase in operational offshore wind capacity by 2030”.

The Crown Estate’s Round 4 tender process, which will commence in October 2019, and run until autumn 2020, includes:

  • A three-stage tender process, evaluating both bidders’ capability and their proposed projects, before using option fees to determine award; a fair, objective and transparent process which reflects the maturing offshore wind market. 
  • Incentives for innovation, encouraging Round 4 developers to incorporate technological innovations within their projects, helping to pave the way for a sustainable deployment pipeline over the long term. Developers will also have the opportunity to propose hybrid projects, such as those which integrate offshore wind with interconnection or other energy generators. 
  • A geographically diverse pipeline - Round 4 projects will come forward across at least three bidding areas, with a maximum of 3.5 GW within any one area, helping to balance new capacity across the country. 
  • Extended 60 year lease terms - (up from 50) enough for two full project lifecycles, reflecting maturing offshore wind technology and operations. 
  • Low cost deployment - Round 4 focuses on water depths out to 60 metres, which are suitable for fixed foundation technology, and will come forward in areas of favourable development resource, helping to enable cost-competitive deployment. 
  • Harnessing the power of data – Round 4 lease agreements will require developers to collate and share project surveys and data, and participate in sector benchmarking schemes such as the System Performance and Reliability Trend Analysis project (known as SPARTA) – helping to build the evidence base in the sector, continue de-risking investment, and drive continued improvements in operational performance. 

Available seabed bidding areas:

  • Working in collaboration with statutory stakeholders, The Crown Estate has undertaken extensive analysis of the technical resource and constraints on the seabed around England, Wales and Northern Ireland, to understand which areas are likely to offer the best resource for offshore wind development at the current time. 
  • This evidence base has informed the seabed areas we are making available to the market through Round 4, known as Bidding Areas, which are: Dogger Bank Bidding Area; Eastern Regions Bidding Area; South East Bidding Area; and Northern Wales and Irish Sea Bidding Area. A map of the four areas, together with further technical information, is available here
  • Within these four areas, competent bidders will have the freedom to identify and propose their own project sites, supported and informed by the data and analysis we make available. This approach harnesses the expertise of developers and helps to ensure strong projects are awarded in the most suitable areas. 

Of the 18 seabed regions initially identified, 10 have been excluded from the offer to market from Round 4, and a further 4 regions have been trimmed, through a two-stage regions refinement process. 

Reasons for removal and refinement included: defence ranges and exercise areas; visual sensitivity (i.e. where development would predominately or entirely be within 13km of shore), overlap with shipping routes that contain traffic of more than 1,000 ships per year, and/or overlap with areas where there would likely be major consenting risk due to cumulative environmental impacts, particularly in relation to ornithology. 

Following project award, The Crown Estate will undertake a plan level Habits Regulations Assessment, to assess the possible impact of the proposed sites on the relevant nature conservation sites of European importance. 

In total, the Round 4 tender process is expected to take approximately 12 months, followed by a Plan-Level HRA of an approximately equivalent period.  Subject to the outcome of the HRA, new seabed rights could be awarded as early as 2021, with developers then progressing to seek planning consent for their own projects through the statutory planning process. Round 4 projects could become operational by the late 2020s. 

In support of Round 4 leasing and beyond, The Crown Estate will invest in a programme of strategic enabling actions to help build high quality data and evidence, to advance the understanding of offshore wind deployment and the impact on the marine and on-shore environment, particularly around cumulative environmental impacts. 

The Round 4 Information Memorandum, which provides a detailed summary of the design and structure of Leasing Round 4, is now available via The Crown Estate website, along with a suite of associated documents, including Regions Refinement Report; 18 Characterisation Area Reports; Summary Stakeholder Feedback Report; Resource and Constraints Assessment Methodology Report; and GIS Shape Files showing the boundaries of the Bidding Areas. 

Projects awarded through Leasing Round 4 will join a robust pipeline of offshore wind in UK waters, with 9.3GW already operational and 4.4 GW currently under construction. A further 20 GW of projects are in the development pipeline (i.e. consented, in planning, or pre-planning). 

Together with the 2.8GW of extensions projects, which passed the Habitats Regulations Assessment phase in August of this year, the UK is on track to deliver over 30GW by 2030. That’s a fourfold increase in the portfolio compared with today, supporting the UK’s continued position as a world leader in offshore wind. 

Hugh McNeal, Chief Executive of industry body RenewableUK commented: 

“It’s great to see the UK stepping up its ambition with a new round of offshore wind development now underway. This will engender further momentum in our world-leading offshore wind sector, securing billions of pounds in investment in new infrastructure. These powerhouses of the future will create thousands of highly-skilled jobs, continuing the rapid regeneration of our coastal communities, as well as benefitting our UK-wide supply chain.”

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