Crown Estate delays next round of offshore wind leases

Crown Estate delays next round of Offshore Wind leases

Business Green, 15 October 2020, by James Murray

Just a week after Boris Johnson ramped up the UK's offshore wind ambitions, the manager of the seabed has pushed back the timetable for awarding the next round of leases

The government's plans to drastically increase the UK's offshore wind capacity received a setback today, after the Crown Estate announced it was pushing back the timetable for awarding the next round of leases for offshore wind developers.

The agency, which is tasked with managing the UK seabed, announced it has updated the timeline for the Round 4 Leasing Round that is expected to deliver around 7GW of new offshore wind capacity, making a major contribution to the government's target of having 40GW in place by 2030.

The Crown Estate said it had previously expected successful Round 4 projects to be awarded agreements for lease in 2021. But the new timetable means it now expects that awards are likely to take place in spring 2022, subject to the outcome of Habitats Regulations Assessments (HRAs).

The hope is that once consented through the statutory planning process, Round 4 projects could still begin generating clean power before the end of the decade.

The delay appears to be a direct result of the disruption caused by the pandemic. The second stage of the leasing process - known as ITT Stage 2 - had been expected to take place this autumn, but will not begin until November. A multi cycle bidding process is expected to then follow in early in 2021 - a timeframe that will extend the preparation time for bidders and avoid bidding cycles potentially coinciding with the Christmas period.

The HRA process will then follow the bidding cycles and is estimated to take a further nine to 12 months.

"Today's announcement updates our intended timeline for the final stretch of our tender, ensuring we can maintain a fair, robust and transparent process," said Jonny Boston, business development manager at The Crown Estate. "With Round 4's continued progress, the UK offshore wind portfolio is poised to play a critical role in unlocking our national Net Zero ambition, and we look forward to continuing to work closely with bidders and stakeholders through the next stage."

The agency stressed that the UK's offshore wind project pipeline remained robust. "In addition to the 10 GW of capacity already in operation, Leasing Round 4 will complement a strong pipeline of offshore wind development in UK waters, which includes a further: 10GW of projects committed and 18GW in development or pre-planning," the agency said in a statement. "Additional capacity is also expected to come forward in Scottish waters, through leasing managed by Crown Estate Scotland, to further strengthen the UK's offshore wind pipeline. Together, this leasing will help unlock capacity to meet the Government's recently announced target of 40GW of offshore wind by 2030."

However, some industry experts expressed disappointment at the delay. Gareth Phillips, partner at law firm Pinsent Masons, said the updated timetable represented "disappointing news for an industry looking to deploy urgently needed renewable infrastructure, and further questions the feasibility of the PM's pledge to achieve 40GW offshore wind by 2030 which are already optimistic".

"Realistically, developers are unlikely to start project development work until they know the outcome of Round 4 and it will then take at least two to three years to obtain survey data and submit a consent application and another one year plus to obtain consent, and then a year or so before construction starts (likely subject to available subsidy)," he added. "The most will need to be made of other projects, earlier in the pipeline, including the balance of Round 3 and Extension projects, if the 40GW target is to be met."

Meanwhile, RenewableUK's head of policy and regulation, Rebecca Williams, said the sector remained committed to delivering on the Prime Minister's long term goal. "Although no one wants to see any delays in the leasing process, we will continue to work closely with The Crown Estate to ensure we maximise the delivery of new offshore wind projects as swiftly as possible," she said. "The Prime Minister made clear in his landmark speech that he wants to see 40GW of offshore wind installed by 2030, nearly quadrupling current capacity. Industry remains determined to achieve this and confident that we will do so."

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