ScotWind lease fees could rise to £100k/km – auction window set to open in April

Crown Estate Scotland has increased tenfold the upper limit on lease fees it will charge offshore wind developers, as it prepares to open a competition to allocate seabed areas for development. The maximum fee that might be paid will increased from £10,000 to £100,000 per square kilometre of seabed.

The organisation decided last month that it would review the structure for ScotWind Leasing, the upcoming leasing round for offshore wind farms in Scottish waters, after an auction for sites in waters around England and Wales saw bids rise sharply.

Crown Estate Scotland said the  updated option structure would have the same basic pricing structure as planned,  but  as well as the hike in bid cap,

The threshold of Supply Chain Development Statement commitments that applicants must meet to request a lease has been increased from 10% to 25%, and there are further change of control provisions will apply if options are resold.

The organisation promised to publish technical information by the end of April to allow registered applicants to progress their interest in ScotWind Leasing.

The closing date for applications will be 16 July 2021.

A total of 8,600km2of Scottish seabed is potentially available for development.

Amanda Bryan, Chair of Crown Estate Scotland, said: “This rapid review was undertaken to reflect the recent changes we have seen in the UK offshore wind market so that we could arrive at a pricing structure which properly reflects those changes.”

Paul Wheelhouse, Minister for Energy, Connectivity and the Islands,said: “Today’s announcement from Crown Estate Scotland balances the increasing value and demand for Scottish seabed with the need to secure a strong offshore wind supply chain which can power our green recovery from COVID-19 and help us meet our net zero target.”

Rebecca Williams RenewableUK’s Head of Policy and Regulation, said: “Now that we have more details about how the leasing round will work, developers and investors will now be able to plan the next steps in bidding for these sites. It’s vital that new leasing supports development of new offshore wind at the cost and scale needed to reach Scotland and the UK’s net zero emissions target”.

 

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