Crown Estate starts Leasing Round 5 for Celtic Sea Floating Wind
The Crown Estate is starting the year with its latest Offshore Wind Leasing Round 5, which relates to floating wind in the Celtic Sea. The four prior leasing rounds have helped the UK become a world leader for fixed-bottom offshore wind, enabling rapid growth and commercialisation.
Round 5 is said to be a "game changer for the UK's offshore wind industry" (Gus Jaspert, Managing Director of the Crown Estate's Marine business), giving developers the chance to be at the forefront of the delivery of UK floating wind energy at a commercial scale.
Three fixed-boundary Project Development Areas (PDA) have been identified in the Celtic Sea (Project Development Areas | The Crown Estate) and they are expected to give an opportunity to deliver up to 4.5GW of floating offshore wind overall, which is enough to provide renewable energy for more than four million homes.
Programme:
It is anticipated that the Pre-Qualification Questionnaire (PQQ) submission window for bidders will run from mid/end February 2024 until mid-April 2024. Information To Tender Stage 1 documents will be issued in mid-August 2024 with the intention that, following the selection of the preferred bidder, wind farm Agreement for Lease(s) granting rights to use the PDA will be completed in Autumn 2025.
There will be a separate wind farm Agreement for Lease for each PDA, and each wind farm Agreement for Lease will allow the successful bidder to take one or more wind farm leases of the relevant PDA, enabling a phased development. It is intended that following entry into the wind farm Agreement for Lease there will then be a ten-year period to exercise the option to grant the wind farm leases, subject to certain conditions being satisfied.
New Approaches:
There are some new approaches proposed in the Round 5 process compared to previous offshore wind leasing rounds, including:
- the potential for alternative export options, including offshore hydrogen pipelines (which would require pipeline agreements and the Crown Estate's approval);
- a new requirement in relation to identifying and securing port rights. Port rights will need to be secured by bidders to enable GW-scale integration services for project delivery near the PDA; and
- a proposal for the Crown Estate to share the risk of consenting delays with the bidder where a delay is beyond a bidder's control, by reducing the bidder's option fee in certain circumstances.
The Crown Estate is also putting emphasis on a new objective in this Round 5, which is to deliver wider social and environmental value during the leasing programme. As the Crown Estate is involved early in the life cycle of an offshore wind project, the Crown Estate is using this as an opportunity to incentivise bidders to think innovatively and assist in protecting and enhancing the natural environment. It's not clear exactly what will be needed from bidders on this, but it's clear this is linked to helping the government meet its net zero objectives.
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