UK seabed landlord The Crown Estate unveiled a revised version of its plans for a next wave of offshore wind leasing that modifies initial proposals over the introduction of “option fees” as part of the bidding process.

The body – which is preparing to later this year offer at least 7GW of development acreage that will underpin growth through the 2020s off England, Wales and Northern Ireland – updated the industry on its latest plans at an event on Thursday.

Recharge revealed alarm earlier this year that the outcome of bidding would be determined by the size of a fee put forward by the bidder for exclusive rights to the site, prompting claims that deep pockets rather than project capability would become the decisive factor.

The Crown Estate said it had listened to earlier feedback on a range of issues to create a three-stage process able “to deliver a fair, balanced and competitive tender, which balances a broad range of interests”.

The option fee plan will now be based around annual, rather than upfront payments around a three-year commitment.

“By introducing staged annual payments, we are reducing the upfront capital requirement on developers, helping to open the process to a broader pool of potential bidders and share development risk, since option fee payments for the full development cycle only apply where projects are progressing,” said The Crown Estate.

Other key updates to the process include:

A “multi-cycle” bidding process to “increase transparency within the bidding community, ensuring that developers have information about the price, location and capacity of awarded projects at each stage, and can therefore review and adjust their bidding strategy as the process progresses”.
A cap to “ensure that projects are awarded in at least three separate seabed Bidding Areas, with a maximum of 3.5GW of project within any one area, helping to ensure geographic diversity of the Round 4 project pipeline”.
Rental discounts of 50% on up to 10% of the project capacity for the first five years of operations for projects with a qualifying innovation. “Developers will also have the opportunity to propose hybrid projects, such as those which integrate offshore wind generation with interconnectors, or other energy sources.”

Jonny Boston, business development manager at The Crown Estate, said: “Our goal has been to design a process that is attractive, accessible and fair, supports the sustainable development of the seabed and ultimately delivers a robust pipeline of new projects that will help the UK’s transition to a low carbon economy.

“Today’s update confirms the tender design for Round 4, giving developers as much information as possible, to inform their planning ahead of launch later this year.”

Wind

UK Crown Estate updates Round 4 offshore wind plans