Plans for the UK to meet its net zero and energy security commitments have received a major boost today as six fixed offshore wind projects, with the potential to generate renewable electricity for more than 7 million homes, have been given the green light by the Secretary of State for Business, Energy and Industrial Strategy to enter into an Agreement for Lease with The Crown Estate.
In April, following the completion of a Habitats Regulations Assessment - an assessment of the potential impacts on the most valuable environmental habitats in the UK - The Crown Estate gave notice to the UK and Welsh Governments of its intent to proceed with the Offshore Wind Leasing Round 4 plan on the basis of a ‘derogation’*.
The Secretary of State for Business, Energy and Industrial Strategy has now provided agreement that The Crown Estate can proceed with the plan, and the Welsh Government has not raised any objections to the notice.
The move marks a significant moment in the UK’s response to climate change. From the first leasing round in 2001, The Crown Estate has supported the development of a world-class offshore wind market, which has grown to become the largest source of renewable electricity in the UK. On 5 July, The Crown Estate also announced plans to develop floating, as opposed to fixed, offshore wind farms in the Celtic Sea, which could bring up to 4GW of additional capacity.
As the climate emergency intensifies and demand for offshore wind accelerates, today’s agreement has the potential to make a critical contribution to delivering sustainable, renewable energy for the UK’s net zero future.
Dan Labbad, CEO of The Crown Estate said:
“Today is a pivotal moment on the UK’s journey towards net zero, strengthening the potential pipeline of future offshore wind projects and building vital resilience in domestic renewable energy supply.
“It is the result of a tremendous collective effort from industry, environmental and conservation stakeholders, governments, and technical experts who have helped shape a rigorous and evidence-led outcome. In convening this broad range of stakeholders, we have been able to take a more informed and strategic approach to environmental compensation than ever before, ensuring we balance our rich biodiversity with the urgent need to progress vital renewable infrastructure.
“As we continue to harness the benefits of UK offshore wind, we remain firmly committed to collaborating with these organisations to build knowledge and evidence to help us understand how the increasingly busy marine environment can continue to thrive and support the wide variety of ecosystems and industries which rely on it.”
Business and Energy Secretary the Rt Hon Kwasi Kwarteng MP said:
“This month saw the price of offshore wind fall to record lows and today’s announcement will take us another step closer to increasing current levels of capacity almost five-fold by 2030.
“We are already a world leader in offshore wind and these new sites will help secure more clean, affordable, homegrown power for millions of households across the country, while reducing their reliance on costly fossil fuels.”
Welsh Government Minister for Climate Change, Julie James MS, said:
“As the first country in the world to declare a climate emergency, we welcome our partnership with The Crown Estate to deliver renewable energy projects here in Wales.
“We want to harness the power of our natural resources to benefit our communities, through projects that invest in local supply chains and green, skilled jobs.”
An improved approach
The derogation process enables plans or projects to progress if certain tests are met, while ensuring the identified environmental impacts are fully offset through environmental compensatory measures. The use of derogation for Round 4 reflects the complex challenges faced as the marine environment becomes increasingly busy – a challenge which is likely to be faced by most future offshore wind developments.
Recognising that, The Crown Estate has pioneered a new strategic approach to the Habitats Regulations Assessment, convening key bodies to work through these challenges, balancing environmental considerations with the urgent need to accelerate offshore renewable development.
The approach includes rigorous environmental assessment supported by an Expert Working Group of relevant UK statutory marine planning authorities, statutory nature conservation bodies, relevant non-governmental organisations and the UK and Welsh governments.
The Habitats Regulations Assessment could not rule out significant adverse effects on two protected habitats (the Dogger Bank Special Area of Conservation and the Filey and Flamborough Head Special Protection Area). Consequently, in accordance with the derogation, for the first time The Crown Estate will establish a Steering Group for each of these two protected sites, comprising government and statutory nature conservation bodies and the relevant project developers to oversee the development and delivery of strategic environmental compensation plans. As projects progress, the Steering Groups will engage with The Crown Estate’s HRA Expert Working Group to develop detailed individual site compensation plans.
For further information about Offshore Wind Leasing Round 4, visit: https://www.thecrownestate.co.uk/round-4/
Notes to Editor
Where are these projects located?
The six Offshore Wind Leasing Round 4 projects are:
Proposed project capacity (MW)
Off the Yorkshire Coast, North East of Scarborough
Off the Yorkshire Coast, North East of Scarborough
Off the Lincolnshire Coast, East of the Humber Estuary
Green Investment Group - Total
Off the Northern Welsh Coast, North East of Anglesey
Consortium of EnBW and BP
Off the Lancashire Coast, West of Blackpool and South West of Morecambe Bay
Offshore Wind Limited, a Joint Venture between Cobra Instalaciones y Servicios, S.A. and Flotation Energy plc
Off the coast of Barrow-In-Furness, West of Morecambe Bay
Consortium of EnBW and BP
You can find full details in the Offshore Wind Leasing Round 4 section of our website.
What happens next?
Over the next few weeks, The Crown Estate will communicate with the preferred bidders for each of the six projects to confirm next steps in connection with the Offshore Wind Leasing Round 4. Any Agreements for Lease granted will secure the necessary environmental mitigation and compensatory measures.
The Crown Estate will establish a Steering Group comprising government and statutory nature conservation bodies to oversee the development and delivery of strategic environmental compensation plans for each of the two affected sites. As projects progress before and during the planning process, developers will be required to work with the Steering Group – which will consult with the Round 4 HRA Expert Working Group - to develop detailed individual site compensation plans.
During the Agreement for Lease stage, developers will progress through the planning process at a project-specific level, which will include a project-level HRA. This provides for significant scrutiny and the opportunity for further review and consultation before any development takes place.
In addition, and where relevant, environmental mitigation and compensatory measures will also be built into Agreements for Lease.
The projects could begin to generate clean electricity by the end of the decade.
How much offshore wind capacity is there in the UK?
The UK has a strong pipeline of offshore wind farms already in operation, construction and planning which now stands at 43GW, with a further 37GW of potential capacity from Offshore Wind Leasing Round 4, Scotwind leasing activity and the up to 4GW of floating wind leasing in the Celtic Sea. See more here.
What is a Habitats Regulations Assessment?
Before awarding seabed rights, it is a legal requirement to undertake a ‘Plan-Level Habitats Regulations Assessment (HRA)’ – an assessment of the potential impacts of Offshore Leasing Round 4 on the most valuable environmental habitats in the UK, which make up the ‘UK National Network’.
A HRA is a rigorous, evidence-based approach which follows a process set out in law. It is not specific to offshore wind – it must be completed for any plans or projects, such as major housing developments, roads and airports, where they could affect protected habitats.
Where HRA is required, a plan or project can only go ahead if:
It does not adversely affect the integrity of any UK National Network site or;
Where such an impact can’t be ruled out, there is no alternative solution to progressing the plan or project and there are imperative reasons of overriding public interest to proceed. In such cases, compensatory measures must be agreed to ensure the overall health of the UK National Network is maintained. This route is known as ‘derogation’.
*What is the derogations process?
Derogation is an established part of the Habitats Regulations Assessments process and can be used where a project or plan could harm protected habitats but there are imperative reasons of overriding public interest to proceed. It is designed to ensure the overall coherence of the UK National Network is maintained while enabling critical infrastructure projects to move forward, subject to compensation for any impact being secured.
Where necessary, any compensatory measures identified through the plan-level Habitats Regulations Assessment will be included as conditions in the Agreements for Lease.
On 21st April 2022, The Crown Estate gave notice to the UK and Welsh Governments of its intent to proceed with the Offshore Wind Leasing Round 4 plan on the basis of a ‘derogation’, following the plan-level Habitats Regulations Assessment.
The Habitats Regulations state that if a response to the derogation notice is not received within 21 days, the plan can be agreed. Alternatively: The Crown Estate can be directed not to agree the plan either indefinitely or for a specified period; the derogation case can be expressly approved; or a direction may be given for The Crown Estate not to agree to the plan, or to agree the plan but only on the basis of specific conditions or restrictions.
What is a UK National Network Site?
The Habitats Regulations protect certain habitats and species through a network of core breeding and resting sites for rare and threatened species, and some rare natural habitat types which are protected in their own right.
The Regulations specifically refer to Special Areas of Conservation (SACs) and Special Protection Areas (SPAs). These sites are given legal protection because they are designated for habitats and species of importance. Together they form a network of protected sites known as the UK national site network.
What potential ‘Adverse Effects on Site Integrity’ were identified through the HRA and what compensatory measures have been proposed?
The potential adverse effects relate to the sandbank feature of the Dogger Bank SAC and the kittiwake feature of Flamborough and Filey Head SPA. These potential effects have been shared with the Expert Working Group, which includes relevant UK statutory marine planning authorities, statutory nature conservation bodies and relevant non-governmental organisations, throughout the HRA process.
The Crown Estate will establish a Steering Group for each of the two protected sites that are affected, comprising government and statutory nature conservation bodies and the relevant project developers to oversee the development and delivery of strategic environmental compensation plans. As projects progress, the Steering Groups will engage with The Crown Estate’s HRA Expert Working Group to develop detailed individual site compensation plans.
Compensatory measures must fully compensate for the negative effects of the proposal and must not have a negative effect on the UK’s national site network as a whole.
Compensatory measures can include creating or restoring the same, or very similar habitat, on areas of little or no conservation value.
The precise detail of compensatory measures is likely to be clear only after detailed project design.
Agreements for Lease will secure the necessary environmental mitigation and compensatory measures.
Further guidance on compensatory measures can be found at gov.uk
Overview of Habitats Regulations Assessments: https://www.gov.uk/guidance/habitats-regulations-assessments-protecting-a-european-site
Overview of Round 4 Plan- Level HRA process: https://www.thecrownestate.co.uk/en-gb/what-we-do/on-the-seabed/offshore-wind-leasing-round-4/round-4-plan-level-habitats-regulations-assessment/
A Guide to Habitats Regulations Assessment (HRA) for Offshore Wind Leasing Round 4: https://www.thecrownestate.co.uk/media/3891/10935-tce-a-guide-to-hra-june-2021-update-v3.pdf
Overview of Offshore Wind Leasing Round 4 (including a map of projects): https://www.thecrownestate.co.uk/round-4/