The Crown Estate has today unveiled further details for Round 5 of its offshore wind leasing competition, offering the opportunity for three commercial-scale floating wind projects to be developed in the Celtic Sea, off the coast of South Wales and South West England. The projects have the potential to deliver enough clean, renewable energy for more than four million homes and have been described as some of the biggest floating wind farms in the world.
The new wind farms will have a combined capacity of up to 4.5GW and mark the first phase of commercial development in the region.
Today marks a critical step in the leasing process, with The Crown Estate launching it’s ‘Information Memorandum’ – a document which lays out to developers the necessary information they need to prepare and submit bids to progress offshore wind projects and win a seabed lease.
Developing an offshore wind farm in UK waters, from initial concept through to commercial operation, can take up to ten years. The Celtic Sea Developer Alliance has described today’s launch as a major step forward for both the industry and for Wales.
Tom Hill, Marine Energy Wales’ Programme Manager said:
“The starting pistol in the race for offshore wind development in the Celtic Sea has been fired. Today’s publication of The Crown Estate’s Information Memorandum has been a long time coming, and many developers are already eager and poised to begin work on obtaining a lease – the first piece in the puzzle to building an offshore wind farm.
We will continue to support developers through the Celtic Sea Developers Alliance, facilitating collaboration to advance the sector and ensure Wales and its communities receive the maximum possible benefit.”
A new chapter for offshore wind
Key dates for Round 5 have been outlined in the Information Memorandum, suggesting that new agreements for lease could be awarded in Autumn 2025, with developers then progressing to seek planning consent for their projects through the statutory planning process.
The Round 5 leasing process will be made up of four stages, including pre-qualification and invitation to tender, before entry into agreements for lease. The process is an opportunity for bidders to demonstrate they meet the necessary legal, technical and financial eligibility criteria.
New features have been announced for Round 5 including:
- A revised Health and Safety approach.
- New requirements in relation to ports and port rights.
- The introduction of an ascending clock auction.
- New Option Fee arrangements to share risk in relation to consenting.
- A requirement for bidders to make commitments in relation to social and environmental value.
The Crown Estate says Leasing Round 5 aims not only to support the establishment of a new industry, but enabling its success, through upfront investment and important workstreams to de-risk the process for developers and accelerate the deployment of projects.
Today’s publication sets out details of a series of contractual commitments for developers to create positive social and environmental impacts, focused on skills and training, tackling inequalities in employment, environmental benefits and working with local communities. Bidders will also be required to demonstrate commitments for the timely access to the port infrastructure needed to successfully develop their projects.
New supply chain opportunities
Round 5 will be the first time floating wind farms have been deployed on commercial scale, presenting a number of supply chain opportunities as the market matures.
The Crown Estate has commissioned new research, due to be published in the new year, to provide a view on how best to maximise the economic and social benefits arising from Round 5 and the longer-term sustainable development of the offshore wind industry.
The Crown Estate has also outlined its intention to bring forward a new pilot fund to help accelerate supply chain projects, with an initial focus on opportunities arising from Round 5. Further details are expected to be set out in the first part of 2024.
Dan Labbad, Chief Executive of The Crown Estate said:
“The UK’s offshore market is one of the most successful in the world and floating wind is the next chapter in this exciting story, backed up by recent support from UK Government to unlock further important capacity over the coming years.
“At its core, The Crown Estate’s role is to serve the country by using its land and seabed to create the best value we can for the nation and for future generations – including social, environmental and financial. This means drawing on the skills, knowledge and input from our full range of stakeholders as we seek to play our part in responding to some of the biggest challenges, whether that’s climate change, nature loss or enabling economic growth.
“This approach has underpinned the development of Round 5, which is the culmination of years of engagement across governments, environmental bodies, industry and other stakeholders. As the collaboration and partnerships that have brought us this far continue, this opportunity stands to be a game-changer for business and communities associated with these projects, as we realise the full potential of floating wind in the Celtic Sea and beyond.”
The Information Memorandum was originally expected to be released earlier in 2023. Gus Jaspert, Managing Director, Marine at The Crown Estate said the document was the result of “extensive engagement” with an enormous array of stakeholders, statutory bodies and government representatives.
In its recent Autumn Statement, the UK Government confirmed its intention to unlock space for up to a further 12GW of capacity in the Celtic Sea.
Prospective Bidders are invited to join a Round 5 Bidders Day in Swansea on 31st January 2024, to hear all the details of the Round 5 tender and ask questions of senior representatives.
Bidders wishing to attend can register here by 17:00 (GMT) on 22 December 2023.