Offshore wind leasing drove record profits for the Crown Estate – England’s seabed landlord – with newly-crowned King Charles pledging to share the bonanza with the public purse.
The Crown Estate, which manages the seabed off England, Wales and Northern Ireland, generated £443m ($560m) in the 2022/23 financial year, up by £130m on the previous 12 months.
“This increase primarily reflects option fee income from the signing of Agreements for Lease for six offshore wind farms through the Round 4 leasing programme and revenue resilience in its other lines of business,” The Crown Estate said in its latest annual report.
The leases followed the UK’s last big auction round for offshore wind development rights that awarded acreage for a potential 8GW of turbines. The round's winners included BP in conjunction with German utility partner EnBW and fellow oil supermajor TotalEnergies in partnership with global offshore wind specialist Corio, as well as utility giant RWE.
The process will spur an estimated £1bn in annual option fees for the Crown Estate, which passes its profits to the UK government, which in turn sends a portion to the royal family under a process called the Sovereign Grant.
King Charles has moved to head off controversy over the renewable energy windfall by signalling that he wanted it to be “directed for the wider public good” and would take a smaller cut for the crown – although the mechanism for that has still to be decided.
The Crown Estate – which is now preparing a milestone 4GW floating wind auction in the Celtic Sea off Wales and southwest England – claimed the nation was now reaping the benefits of efforts “to create a world-leading offshore wind market. We are now focused on how we continue to maintain the UK’s position as a global leader, including supporting other technologies, the supply chain, skills and jobs, all of which are vital to a net zero and energy secure future”.
The UK has almost 14GW of offshore wind in operation, second only to China globally, and a government goal to reach 50GW by 2030, although the sector is currently beset by challenges ranging from slow planning consents and legal challenges to soaring project costs for developments already underway.
