Offshore wind was the major growth area in The Crown Estate’s Energy, Minerals & Infrastructure sector last year.
Income across the estate as a whole totalled £441 million and profit £389 million, allowing it to return £343 million to the Treasury.
Energy, Minerals and Infrastructure, which includes offshore wind, delivered £74.4 million of revenue and profit of £70.5 million (up from £73 million and profit of £68.9 million in 2018), although lower than average wind speeds throughout the year saw income from existing wind farms fall by £3.8 million compared with 2018.
The portfolio also includes dredging and other offshore activities, and onshore mineral extraction royalty income of £11.6 million, down from £15.6 million in 2018.
The portfolio’s value increased by 12.9% to £1,586.3 million in 2018/19.Three offshore wind farms became fully operational in the year, delivering a total of 1GW of capacity. In addition the Nemo interconnector with Belgium went into operation and work progressed on the IFA interconnector with France and the Viking Link with Norway. The Crown Estate receives rental income from interconnectors. Licence income from undersea cables and pipelines was £21.8 million, down from £24.9 million in 2018.
The company said “the political, economic and regulatory environments that support the future growth of the offshore wind sector have become much clearer, following the publication of the joint government and industry Sector Deal in March.” The Sector Deal set a vision for UK offshore wind to deliver up to 30GW of capacity by 2030. The company also noted more clarity over upcoming contracts for difference allocation rounds.
During the year, the company confirmed eight project applications for extensions to existing offshore wind farms, with the potential to deliver up to 3.4GW of new capacity, following an invitation in 2017 to bring forward projects.Some 4.5GW in new projects from Leasing Round 3 has entered the planning process, comprising Hornsea (Ørsted, 2.4GW), Norfolk Vanguard (Vattenfall, 1.8GW) and Thanet Extension (Vattefnfall, 300MW).
Last year TCE also announced its intention to launch Leasing Round 4, which should deliver 7GW of additional capacity. It said,“We expect offshore wind to be a significant driver of capital growth over the next decade”. That has been delayed by changes to the lease allocation process.
The company has also committed to fund a programme of strategic enabling actions, working with the government and the devolved administrations in Wales and Northern Ireland, industry and a range of stakeholders. That includes the Offshore Renewables Joint Industry Programme. It also funded data pilots with offshore wind operators to capture and better understand common data and digitisation challenges, including SPARTA, a benchmarking platform monitoring the operational performance of offshore wind farms
The company reduced carbon emissions intensity on its estate, which is now down by 34% compared to 2012/13. The target is a 40% reduction against the 2012/13 baseline by 2022/23. A 15.4% year on year reduction in 2018/19 was partly due to changes in the Defra emissions factor.
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