'Power for quarter of UK homes' | Leases sealed for new generation of offshore wind giants

The UK set the seal on plans for 8GW more offshore wind developments off its coasts with news that seabed landlord the Crown Estate has signed final lease deals for projects that won its Round 4 auction and will be key to Britain meeting its massive ambitions for power supply from the fast-growing sector.

The agreements for lease mark the end of a process for the six fixed-bottom megaprojects that began in February 2021 when they were given preferred bidder status after being declared winners of the auction, which generated controversy aroundthe inclusion of ‘option fee’ payments worth about £1bn ($1.2bn) a year in the process – that some complained favoured deep-pocketed players and drove up costs in the sector.

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The projects between them have the potential to power a quarter of Britain’s 28 million homes, said the Crown Estate, whose CEO Dan Labbad added: “They demonstrate the far-reaching value that our world-class offshore wind sector can deliver for the nation: home grown energy for all, jobs and investment for communities, revenue for the taxpayer, clean energy for the benefit of the environment and a considerate, sustainable approach which respects our rich biodiversity.”

Round 4’s winners include BP in conjunction with German utility partner EnBW and fellow oil supermajor TotalEnergies in partnership with global offshore wind specialist Corio.

The leasing round also further confirmed the shallow Dogger Bank region in the North Sea off northeast England as a world-scale hotbed of offshore wind development. RWE won leases for its Dogger Bank South (East and West) projects of 3GW between them, adding to the German utility’s own 1.4GW Sofia and Equinor and SSE’s 3.6GW mega-development in the area.

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The projects (see panel) have since winning the auction been subject to Habitats Regulations Assessments and can now push on into the UK planning system for major projects and seek development consent, which would in turn open the way for them to enter future government auction rounds for contract-for-difference (CfD) power deals.

The six, three off northwest England and Wales and three in the North Sea off the English northeast, will play a decisive role in helping the UK hit its ambition to have 50GW installed by 2030, about four times what’s in place now.

'Maturity of world-class market'

Dan McGrail, CEO of industry group RenewableUK, said: “This announcement represents a major step forward not just for these major offshore wind projects but also for the industry as a whole, as these lease agreements will strengthen our energy security, create jobs and support development of new UK supply chains.

“It demonstrates the continuing ability of the UK to attract billions of pounds in private investment due to the maturity of our world-class offshore wind market.”

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RWE’s UK country chair Tom Glover added: “Dogger Bank South East and Dogger Bank South West will be our largest offshore wind developments to date; using our industry expertise pioneered over 20 years in the UK, we plan to maximise this potential for the benefit of local businesses, creating new, high quality long term jobs and supporting new skills development, investing in both the regional and national economies.”

The Crown Estate is now pressing on with plans fora 4GW leasing round for floating wind acreage in the Celtic Sea off western England and Wales, due to launch later this year.

Its counterpart to the north, Crown Estate Scotland, has run giant seabed auctions of its own, including the vast 28GW ScotWind round that raised the bar for floating wind globally.