Crown Estate's offshore bonanza
The UK's seabed landlord pulled in more than £15m ($24.5m) revenue from the burgeoning national offshore wind fleet in 2013-14 – up by almost half.
The previous year offshore wind had delivered £10.6m to the Crown Estate's coffers.
“Basically we have had a really good year in all three core performing areas of our business – in energy infrastructure and the two more traditional areas of real estate,” Rob Hastings, the organisation's director of energy and infrastructure, tells Recharge.
“With offshore wind we are projecting a continuous ‘quite solid’ 10% per annum growth through to 2020. The capital value of our offshore wind portfolio has now reached £500m.”
Hastings says the Crown Estate's latest annual report shows that this has been the year when offshore wind "comes of age and is getting quite solidly based within the UK energy sector".
“Energy infrastructure, which includes the renewables portfolio, is an area of relatively high growth for us – in terms of it starting quite small, but is now growing very quickly,” he adds.
“In the UK we now have almost 1,500 offshore turbines either installed or under construction, so we have seen quite a significant rate of growth over the last decade.
“The offshore wind industry has so far probably invested around £20bn in UK offshore wind, mostly Round 3 investments, but also in some Round 2 offshore areas.”
The Crown Estate says the offshore performance was helped by strong wind conditions and a swelling installed capacity that stands at 4.3GW.
Hastings says the organisation thinks “all the time” about future offshore wind rounds “but at the moment has no plans for a Round 4”.
“There is still quite a lot of wind development capacity in the pipeline right now, so our real job is to make sure we get as much value as possible from the project pipeline that is already out there.
“There are so many projects which are almost ready to go, but we just need to get them over the wire. I am absolutely confident that 10GW of UK offshore wind by 2020 is absolutely achievable.
“Beyond that, we have a huge 30-40GW pipeline of projects which are being taken through to development.”
Hastings is also “confident we will see something announced quite soon” on establishing a floating turbine demonstrator site in Scotland.
“The technology has moved to the point where we think it is right to put a demonstration project out there, so we are pushing for it as fast as we can,” he says.
“The question is: 'Does floating technology work?', and all the indications right now are that it probably will.
“Statoil’s Hywind project off Norway has been very successful, and the technology they are looking at to put into the Scottish site is an evolution of that technology which will be quite exciting.”
The Crown Estate – which manages a huge swathe of UK assets ranging from coastline to retail hubs – says offshore is on track to meet 10% of national power demand by 2020.
It says its energy team faced a “year of change and volatility” as power market reforms were finalised, leading to “some inevitable attrition in offshore wind, which we see as a positive step in the maturing of the industry".