Promising times for UK Offshore Wind

Promising times for UK Offshore Wind

There is a genuine feel good factor surrounding UK offshore wind at present.

The recent sector deal announcement provided a welcome boost – a validation that the sector has now reached maturity. It can still trumpet its green credentials but now offshore wind also represents a low cost, secure source of energy with the potential to create a significant number of skilled UK jobs and deliver tangible local economic benefit.

Realising the potential of the sector deal aspirations, however, relies on a certain level of activity – a pipeline of new offshore wind farm projects around the UK – with a focus on 2030, then 2050 and an overall ambition to lay the foundations for a sustainable sector at scale for the foreseeable future.

To that end, the new offshore wind Crown licensing rounds present a welcome fillip. These are coming forward in different guises:

  • First, we have the Extensions process. For this, the Crown Estate (CE) invited the owners of existing, operational projects in waters around England and Wales to apply for Crown rights to develop an adjoining extension project if they wished (up to the Megawatt capacity of the existing project). The process identified over 3GW of potential new capacity spread across eight proposed projects. These projects are being assessed as part of a plan level Habitats Regulation Assessment (HRA). If cleared to proceed, these projects will obtain options for lease from the Crown Estate before embarking on the project-specific consents processes. The outcome of the HRA is expected in early summer, with option awards soon thereafter.
  • Following a little way behind the extensions process is the CE’s new offshore wind licensing round (known as “Round 4”). The CE is identifying broad areas of the seabed within which it would be willing to lease options for wind development. A pre-qualification stage for potential bidders is then due to begin within the next couple of months. This will be followed by an invitation to tender phase, then a plan level HRA, with awards of options for lease due to be granted late next year. The Crown Estate has estimated that up to 7GW of new capacity could ultimately emerge from this process.
  • Running to a similar timeline is Crown Estate Scotland’s (CES) new offshore wind licensing round (known as “ScotWind”). CES will run a tender seeking applications for options for lease for offshore wind sites within Scottish waters. Awards of options will only be given inside areas identified by Marine Scotland as part of its sectoral marine plan process. CES and Marine Scotland broadly are running these processes in tandem to minimise the overall timescales. No gigawatt target has been set by CES, however there is a general feeling that the round could deliver more capacity than originally thought.

While we do not yet know the final details of the CE or CES licensing processes, it seems that eligibility and award criteria are likely to be subtly but materially different for both. That, together with the different physical characteristics of areas available, will present an interesting array of options for would-be bidders and a further welcome shot in the arm for the UK’s burgeoning offshore wind sector.

Scott McCallum is a partner in Shepherd and Wedderburn’s Clean Energy Group.

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