The Crown Estate has 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
The Crown Estate, which acts as manager of the seabed around England, Wales and Northern Ireland, is making four broad areas of seabed available to the market, within which potential developers will have the opportunity to bid for project sites.
The launch follows over 18 months of engagement with the market and stakeholders through which The Crown Estate has developed and refined its proposals.
The Round 4 Information Memorandum, which provides a detailed summary of the design and structure of Leasing Round 4 was made available via The Crown Estate website on 19 September, 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.
In addition to the information provided through these documents, The Crown Estate is holding a ‘Bidders Information Day’ on 9 October 2019 to provide potential leasing round participants with a detailed overview of the Round 4 process.
The Crown Estate director of energy, minerals and infrastructure Huub den Rooijen 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 Round 4 tender process, which will commence in October 2019, and run until approximately October 2020, includes a three-stage tender process, evaluating both bidders’ capability and their proposed projects, before using option fees to determine award.
It also includes 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.
Another important part of Round 4 is 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.
The process also offers extended 60-year lease terms – up from 50 – enough for two full project life cycles, reflecting maturing offshore wind technology and operations. It focuses on water depths out to 60 m, which are suitable for fixed foundation technology, and will come forward in areas of favourable development resource, helping to enable cost-competitive deployment.
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 derisking investment, and drive continued improvements in operational performance.
Working in collaboration with statutory stakeholders, The Crown Estate has undertaken extensive analysis of the technical resource and constraints on the seabed around England, Wales and Northern Ireland, to understand which areas are likely to offer the best resource for offshore wind development at the current time.
This evidence base has informed the seabed areas it is making available to the market through Round 4, known as Bidding Areas, which are: 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 made available. This approach harnesses the expertise of developers and helps to ensure strong projects are awarded in the most suitable areas.
Of the 18 seabed regions initially identified, making up the seabed around England, Wales and Northern Ireland, 10 have been excluded from the offer to market from Round 4, and a further 4 trimmed, through a two-stage regions refinement process. Reasons for removal or refinement included: defence ranges and exercise areas; visual sensitivity (such as where development would predominately or entirely be within 13 km 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.
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 confirmed in July 2019, 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 18 new offshore wind projects could be awarded through Leasing Round 4.
Projects awarded through Leasing Round 4 will join a robust pipeline of offshore wind in UK waters, with 9.3 GW already operational and 4.4 GW currently under construction. A further 20 GW of projects are in the development pipeline (consented, in planning, or pre-planning).
Together with the 2.8 GW of extensions projects, which passed the Habitats Regulations Assessment phase in August of this year, the UK is on track to deliver over 30 GW by 2030, a fourfold increase in the portfolio compared with today, supporting the UK’s continued position as a world leader in offshore wind.