Crown Estate offers up 7GW through Round 4

  1. Offshore wind farm September 19, 2019

    The Crown Estate has today (19 September 2019) officially 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. With the potential to meet the electricity needs of over six million homes, Round 4’s launch follows over 18 months of engagement with the market and stakeholders.

    The Crown Estate, which acts as manager of the seabed around England, Wales and Northern Ireland, is making four areas of seabed available to the market. The sites the Crown Estate has deemed viable for potential development includes the Dogger Bank Bidding Area; Eastern Regions Bidding Area; South East Bidding Area; and Northern Wales and Irish Sea Bidding Area.

    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 The Crown Estate makes available. This approach harnesses the expertise of developers and helps to ensure strong projects are awarded in the most suitable areas.

    The Crown Estate has also released the Round 4 Information Memorandum, which provides a detailed summary of the design and structure of Leasing Round 4 which is 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.

    The Crown Estate is also holding a ‘Bidders Information Day’ on 9th October to provide potential leasing round participants with a detailed overview of the Round 4 process.

    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.

    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 this 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.

    As it confirmed in July 2019, the Crown Estate noted that the maximum individual project size which may be awarded through Leasing Round 4 is 1.5 GW. The minimum individual project size is 600 MW in the Dogger Bank Bidding Area, and 400 MW in all other Bidding Areas. These capacities mean that between five and eighteen new offshore wind projects could be awarded through Leasing Round 4.

    Today’s announcement follows news last month that The Crown Estate had completed the  plan level Habitats Regulations Assessment (HRA) for the 2017 project extension applications. Seven projects with a combined capacity of 2.85 GW will now progress to the award of rights stage. The developers of the seven extensions will now progress with project specific environmental assessments and surveys before seeking planning consent for their projects through the statutory planning process.

    The UK is currently a world leader with regards to installed offshore wind capacity with 9.9 GW installed and 3.7 GW in construction or post financial closure. The government has set a target for ‘up to 30GW’ of offshore wind by 2030.

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