Crown Estate Scotland completes ScotWind Leasing review

Crown Estate Scotland has announced the outcome of its review of the option structure for ScotWind Leasing, the leasing round for offshore wind farms in Scottish waters.

Crown Estate Scotland completes ScotWind Leasing review

The review was announced last month in response to the new market dynamics of the offshore wind sector following the result of The Crown Estate’s recent auction for sites in waters around England and Wales.

Crown Estate Scotland’s updated option structure has now been finalised. The key outcomes are:

  • ScotWind Leasing will keep the same basic pricing structure for option agreements.
  • The previous maximum fee that might be paid was £10,000 per km2 of seabed. This will now be increased to a maximum of £100,000 per km2.
  • The threshold of Supply Chain Development Statement commitments that applicants must meet to request a lease has been increased from 10% to 25%.
  • Further change of control provisions will apply to resale of options awarded.
  • Additional technical information will be published by the end of April to allow registered applicants to progress their interest in ScotWind Leasing.
  • The Closing Date for applications will be 16 July 2021.

Option fees are paid by successful applicants to Crown Estate Scotland in exchange for securing the rights to areas of seabed that have been identified as suitable for development in Marine Scotland’s Sectoral Marine Plan. A total of 8,600km2 of Scottish seabed is potentially available for development. Funds will be returned to the Scottish Government for public spending to drive the green recovery and help deliver government priorities.

Amanda Bryan, chair of Crown Estate Scotland, said: “This rapid review was undertaken to reflect the recent changes we have seen in the UK offshore wind market so that we could arrive at a pricing structure which properly reflects those changes.

“Throughout the development of ScotWind Leasing we have sought to secure best value for communities and help place Scotland as a competitive destination for the investment needed to turn potential projects in to reality. This review achieves both of these goals.

“We look forward to working with the offshore wind sector to realise the benefits of offshore wind for Scotland’s communities and for the environment.”

Cabinet secretary for environment, climate change and land reform, Roseanna Cunningham, said: “The Scottish Government’s climate change plan requires a zero carbon electricity system by 2030 – maximising offshore wind’s contribution will be vital to achieving this and therefore is a key priority for this government.

“ScotWind will support the continuing growth and expansion of this technology, harnessing this huge resource for our energy system and helping to unlock significant investment in the supply chain to create more green jobs across the sector, while seeking to achieve a fair value for Scotland’s assets.

“We know how keen the industry are to start developing and delivering projects, which is why I thank Crown Estate Scotland for undertaking this rapid review of pricing options and setting out their next steps in a timely manner which enables the developers to move forward.”

Minister for energy, connectivity and the islands, Paul Wheelhouse, said: “The ScotWind leasing round is critical to the delivery of a strong and vibrant offshore wind sector in Scotland that can be world-leading, particularly in the delivery of floating offshore wind technology. Scotland is uniquely placed to capitalise on this technology and grow an industry that not only provides electricity, but facilitates the growth of a hydrogen economy as well.

“Today’s announcement from Crown Estate Scotland balances the increasing value and demand for Scottish seabed with the need to secure a strong offshore wind supply chain which can power our green recovery from COVID-19 and help us meet our net zero target. I thank Crown Estate Scotland for completing their rapid review and look forward to the timely resumption of the ScotWind process.”

Scottish Renewables’ CEO Claire Mack added: “The importance of the ScotWind Leasing process to the delivery of an offshore wind industry which can support thousands of jobs and our net-zero target should not be underestimated.

“Industry always understood the reasons for this delay and we are pleased that Crown Estate Scotland has delivered these changes within a matter of weeks, keeping the process on track for the majority of Scottish Renewables members who have already spent thousands of hours and millions of pounds getting ready to bid for the seabed leases they need to build their projects.

“It is now for those individual developers to decide if the new price of these leases reflects their assessment of the value of the contracts which they will need to secure from the UK Government.

“Scottish Renewables and its members are already working to increase the competitiveness of supply chain businesses. We will continue to work with Crown Estate Scotland and the next Scottish Government to ensure that support for the supply chain is strategically focussed in a way that enhances the competitiveness of the widest-possible range of businesses, based on evidence provided by a number of ongoing assessments, not least through the Scottish Offshore Wind Energy Council, in which industry, government and its agencies play an increasingly-important role.”

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