News

The Crown Estate opens Round 3 of offshore wind farm tender

26 September 2008

Development partners invited to tender for developing Round 3 wind farm Zones

The Crown Estate has today, Friday 26 September 2008, issued an Invitation to Negotiate to registered developers for the Round 3 offshore wind farm leasing programme for the delivery of up to 25GW (gigawatts) of new offshore wind farm sites by 2020. Ninety-six UK and international companies have registered their interest in Round 3, greatly exceeding expectations. This follows the announcement made at the BWEA (British Wind Energy Association) conference in central London on 4 June.

Potential developers who have registered have been invited to bid for one or more of nine (9) development zones identified through the Marine Resource System (MaRS) by The Crown Estate. These Zones will be finalised following the Government’s decision on the Strategic Environmental Assessment (SEA) being undertaken by the Department for Business, Enterprise and Regulatory Reform (BERR). Successful bidders will have exclusive rights to develop wind farms in specified Zones in partnership with The Crown Estate.

Welcoming the launch of the tender process, Business Secretary John Hutton said,

"The launch of The Crown Estate bidding competition is a huge opportunity for investors and developers to play a part in the renewables revolution sweeping the UK. Offshore wind could dramatically increase the amount of electricity generated in this country from clean, green sources."

The selected partners will remain wholly responsible for construction and operation of wind farm sites. The Crown Estate is not intending to take any role in the eventual ownership or operation of offshore wind farms resulting from this program other than to provide leases of the seabed to operators.

As owner of the seabed, The Crown Estate has a central role in the delivery of offshore wind. Round 3 builds on the 8GW of offshore wind farm projects currently under development and to be delivered by Rounds 1 and 2 of offshore wind farm development. If successful, the addition of the capacity from Round 3 could lead to a potential total of 33GW of wind energy coming from offshore wind resources – an important contribution to both reducing CO2 emissions in the UK and the UK’s security of energy supply.

The rapid development of offshore wind capacity is central to the delivery of the UK’s share of the EU target of 20 per cent renewable energy by 2020.

Rob Hastings, The Crown Estate’s Director of Marine Estates, said:

“Round 3 is important because it is attracting the attention of UK and international companies to invest in offshore wind projects in UK waters. Attracting such investment is the only way in which Government targets can be met, enabling offshore wind to play a full part in the UK’s energy mix – tackling concerns over both energy security and climate change.

“The investment will be very significant and presents opportunities for UK companies in the supply chain, UK ports and other infrastructure support. Early movers could reap the benefits and The Crown Estate will be engaging with these potential players to ensure they are well placed to take full advantage of the opportunities.

“The Crown Estate has worked very closely with BERR and the Round 3 invitation to tender compliments the Government’s Strategic Environmental Assessment process that will give greater certainty to both developers and the supply chain.”

The Crown Estate is being advised by Norton Rose LLP, SJ Berwin LLP, Gleeds, Climate Change Capital and PriceWaterhouseCoopers.

-ends-

Notes to editors:

Background

1. The announcement follows the announcement by the Department for Business, Enterprise & Regulatory Reform in December 2007 of a Strategic Environmental Assessment of UK waters to open up the seas for to up to 33GW (gigawatts) of offshore wind energy.

2. The Crown Estate launched the Round 3 programme in June 2008 at the BWEA’s offshore wind conference in London.

3. The SEA is assessing the objective of achieving up to a further 25GW of offshore wind generation capacity by 2020, on top of current plans for 8GW of offshore wind. For offshore wind leasing, the SEA covers English and Welsh Territorial Waters and the Renewable Energy Zone, including in the Scottish Renewable Energy Zone, up to a depth of 60m.

4. The scoping consultation phase of the Strategic Environmental Assessment is now complete and a “synthesis of the responses” has been published on BERR SEA website. SEA work is on course for publication of the Environmental Report in January 2009, followed by a Government decision in Spring. For further details of the BERR Offshore Energy SEA, scoping consultation document or Synthesis of Scoping Responses then go to BERR SEA website: www.offshore-sea.org.uk.

5. At the 2007 Spring Energy Council, the EU Heads of Government agreed a package of energy measures which included a commitment to source 20% of the EU's energy from renewables by 2020. The UK Government has stated it is firmly committed to increasing renewable energy use, as an integral part of its wider strategy to tackle climate change and ensure the UK’s energy security. For further information on BERR Energy Policy and the UK Renewable Energy Strategy, please go to BERR website: http://www.berr.gov.uk/energy/index.html.

6. The Crown Estate has separately taken applications for offshore wind farm development within Scottish territorial waters. This is outside of the BERR SEA process.

7. Under The Crown Estate Act 1961, The Crown Estate is landowner of the majority of UK seabed within territorial waters and approximately 55% of the foreshore (www.thecrownestate.co.uk). It also exercises the UK’s rights to exploit the areas outside territorial waters for renewable energy production within the UK’s Renewable Energy Zones. The Crown Estate’s permission, in the form of a site option Agreement and Lease, is required for the placement of structures or cables on the seabed, this includes offshore wind farms and their ancillary cables and other marine facilities. During Rounds 1 and 2, successful applicants were awarded an option for a Lease by The Crown Estate. Potential offshore wind farm developers also require statutory consents from a number of Government departments before development can take place. When all necessary statutory consents are obtained by the developer The Crown Estate can grant a site lease for a development.

Round 3 programme

8. The Crown Estate’s role will revolve around programme delivery and zone contract management; the partners will work with The Crown Estate to identify suitable sites within zones and, once identified, focus on addressing delivery of specific projects. The Crown Estate will not be involved in the construction or operation of wind farm sites. This will be wholly the responsibility of the partners. In terms of ongoing ownership its role will be limited to that of landlord.

Indicative timings for the Round 3 tender are:

• September 2008: Release of Invitation to Negotiate and key contracts
• March 2009: Submission of bids
• Q3-Q4 2009: Completion of awards to Zone Partners
• 2010 onwards: Consenting process begins

The Crown Estate

With a property portfolio encompassing many of the UK’s cityscapes, ancient forests, farms, parkland, coastline and communities, The Crown Estate’s role as employer, influencer, manager, guardian, facilitator and revenue creator is unique.

We have two main objectives: to benefit the taxpayer by paying the revenue surplus earned from our assets directly to the Treasury; and to enhance the value of the estate and the income it generates.

Our portfolio has a value of over £7 billion, demanding the utmost in professionalism and efficiency from our staff and management to create added value for everyone – the people, businesses and communities who deal with us, and the nation as a whole.

Our estate is part of the fabric of Britain - from beef farms in the north of Scotland to Portland stone mining in Dorset, from offices in the West End to affordable homes in the East End, from forests in the West Country to parkland in Windsor. It also includes:

• significant London holdings,
• 119,000 hectares of agricultural land
• extensive marine assets throughout the UK, including 55% of the foreshore and all the seabed out to the 12 nautical miles limit

The role of The Crown Estate has never been more important than it is today. While preserving the heritage for which we care is a vital priority, the way in which we fulfil this important responsibility is driven by the best and most advanced business practices available to us

Further details:

Full details on the Round 3 programme and notices to be published in the EU Official Journal will be available on The Crown Estate’s website.

The address is www.thecrownestate.co.uk/round3.

There is also an email address where industry should submit any other queries, this is round3@thecrownestate.co.uk.

Any queries regarding the Offshore Energy SEA should be directed to the Offshore Wind Policy team at BERR – emma.cole@berr.gsi.gov.uk or angela.wratten@berr.gsi.gov.uk.

For press queries please contact:

Esther Black at Pagoda PR on 0131 556 0770, esther.black@pagodapr.com