By The Crown Estate has today launched Offshore Wind Leasing Round 4, opening up the potential for between 7 and 8.5 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.
This announcement follows over 18 months’ of engagement with statutory stakeholders and industry, alongside extensive analysis of the seabed around England, Wales and Northern Ireland to identify those seabed areas which offer the best resource for offshore wind development at the present time.
As part of this process, The Crown Estate has confirmed it is making four broad areas of seabed, known as Bidding Areas, available to the market. Competent bidders will then have the opportunity to identify and propose project sites within these Bidding Areas, supported and informed by characterisation data and analysis being made available by The Crown Estate.
Eastern Regions has been confirmed as one of the four Bidding Areas coming forward, together with Dogger Bank, South East, and Northern Wales and Irish Sea.
A three-stage tender process, commencing in October 2019, will first evaluate potential bidders’ capability, and then their proposed projects, before using option fees to determine the award of new seabed rights. This approach will help ensure that strong projects, proposed by capable bidders, are awarded in the most suitable areas.
In line with Round 4 tender requirements, projects will be awarded across at least three bidding areas, with a maximum of 3.5 GW within any one area; helping to deliver a geographically diverse pipeline of projects in UK waters.
Following project award (anticipated to conclude in autumn 2020) The Crown Estate will undertake a plan-level Habitats Regulations Assessment (HRA) to assess the possible impact of the proposed sites on the relevant nature conservation sites of European importance.
Subject to this assessment, new seabed rights could be awarded in 2021. Developers will then progress to seek planning consent for their projects through the statutory planning process, which will involve consultation and engagement with local communities and stakeholders. Round 4 projects could become operational by the late 2020s.
18 areas of seabed around England, Wales and Northern Ireland were originally identified as offering potential resource. Of these 18 regions,10 have been excluded from the Round 4 offer to market, and a further four regions have been trimmed, through a two-stage regions refinement process. Reasons for removal or 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.
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.
“Today’s announcement is the first stage of a leasing process, which will see projects evaluated through the Habits Regulations Assessment, after which planning consent will be sought through the statutory consenting process. The projects awarded will be joining a robust pipeline of projects in UK waters, delivering clean, affordable, home-grown electricity”.
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.”
The Crown Estate’s Round 4 leasing process includes:
• Incentives for innovation – encouraging 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.
• 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 an evidence base in the sector, continue de-risking investment, and drive continued improvements in operational performance.
The Round 4 Information Memorandum, provides an overview of the UK market and The Crown Estate’s role, alongside a detailed summary of the design and structure of Leasing Round 4. This will be available via The Crown Estate website, along with a suite of associated documents, including the 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.
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