Crown Estate launches round 4, the first major UK auction for offshore wind leases in a decade

Following the recent news (Thursday 19th September) that the Crown Estate will be launching round 4 of offshore wind leases in the UK;

Mohit Prasad, Project Manager at GlobalData, a leading data and analytics company, offers his view:

“The Crown Estate, which acts as manager of the seabed in the UK has identified 4 broad areas of seabed which would be made available for offshore wind power development in the UK. Through round four of auction, 7 gigawatt (GW) of new offshore wind capacity will be added in the UK. A maximum of 3.5GW of new capacity can be allocated to one area. Developers will be granted 60 year seabed permits under the auction with the permits being awarded in 2021 at the earliest and projects coming online in late 2020s. The last major round of offshore wind licensing took place a decade ago where winners were announced in early 2010.

“The UK has installed 22GW of wind installations since 2018. Out of this around 8GW came from offshore wind installations. By 2030, the offshore wind installation is expected to rise up to 29.7GW contributing more than 58% to the country’s wind installations. Since 2018 offshore wind contributed around 8% to the country’s power mix. With the country’s plan to phase out all its coal fired plants by 2025, the contribution of renewable energy in the generation mix is expected to increase. The offshore wind is expected to contribute around 20% to the country’s power mix by 2030.

“With the country’s target to become zero carbon emissions by 2050 the focus on the development of renewable energy technologies is required. Post-Brexit, carbon tax will come into effect if the UK leaves the EU without an agreement. If the UK leaves without the deal then it would cease to participate in the EU emissions trading system (EU ETS). This measure would introduce a tax on carbon dioxide emissions made by the stationary installations. So, the plant proponents might start looking for alternatives by having a generation fleet being powered by renewable energy technologies. The Big six companies – British Gas, EDF Energy, E.ON SE, npower, Scottish Power and SSE which hold more than 70% of the domestic supply market will have to realign their generation fleet. With the developers seeking to realign their generation fleet the auction can witness big developers bidding for the offshore wind projects.”

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