The auction was suspended after lease offers in England and Wales made exceptional profits at Queen and Treasury.
First on Friday, February 12, 2021 at 06:00 GMT
The Queen’s asset manager in Scotland delayed auctioning plots on the Scottish seabed for wind farms after leases in England and Wales gave the Queen and Treasury an unexpected profit of billions of pounds.
Crown Estate Scotland suspended its bids for a review of the procedure after the “unprecedented” tender at a rental auction in England and Wales last week reached record levels.
The Queen and Treasury may only provide a percentage of up to nine billion pounds over the next decade of the auction in England and Wales after power companies, adding to BP, showed up to pay five times more than expected for the option of building new wind farms. .
Crown Estate Scotland has with the ministers of the Scottish Parliament that it would be “judicious” to adopt a six-week review of the design of its own auction to ensure a “fair price” for seabed sites along the Scottish coast.
Many players in the renewable energy sector have blamed Crown Estate’s auction design for allowing competitive “over-closed” bids from oil corporations to distort the seabed lease market.
BP took its first step in the UK offshore wind industry at last week’s auction with bids for two wind farms 15 times the rate paid through developers in the past, leading to fears within the industry that high seabed tariffs would inflate the burden of achieving the UK. . climate targets.
Energy executives warned that prices would in the end lead to higher-strength expenses and decrease returns for green investors. The UK government hopes to build enough offshore wind farms to force each and every home in the UK until 2030.
Crown Estate Scotland manages the Queen’s assets, but unlike Crown Estate, which manages assets in the rest of the UK, it returns its profits to the Treasury or queen. Instead, income is donated to the Scottish Consolidated Fund. which in turn budgets the Scottish government.
The review will close on March 24, but Crown Estate Scotland has not set a new date for the auction to start, which will begin next month.
Amanda Bryan, president of Crown Estate Scotland, said the “unprecedented outcome” of the Auction in England and Wales “changed the market dynamics around the lease of offshore wind energy overnight and may have implications for the progression of offshore wind energy in Scotland. “
What is offshore wind power like for the UK’s electricity system?Offshore wind farms produced 8% of the UK’s electricity in 2018, estimated through the RenewableUK industrial framework. approximately 2,000 turbines. There are now approximately 8 GW of capacity, of which 1. 3 GW was added in 2018. Another five GW are already engaged. The UK owns 44% of all European offshore wind capacity.
The first subsidies to offshore wind farms promised a development consisting of a guaranteed value of up to 150 euros consisting of megawatt hours, or approximately 3 times the wholesale value of electricity. These giant subsidies would not be sustainable, however, the industry’s load discounts have reduced it. EUR 57. 50. The offshore wind industry has already been criticized for not having enough British contractors and suppliers.
What are the economic benefits of the UK?The industry employs about 11,000 people. One of the side effects of the expansion of offshore wind energy has been an injection of cash and jobs in coastal cities, which in some cases have a huge amount of economic deprivation. The ports have been modernized and new maintenance amenities have been incorporated. built, like Newhaven in East Sussex for the first wind farm in the English Channel. The other parts of the turbines are manufactured throughout the UK, from the Isle of Wight to Hull.
What long term for offshore wind energy in the UK?The government has set aside a pot of 557 million pounds for renewable energy subsidies over the next few years, most of which are expected to be absorbed through offshore wind farms. export opportunities for British corporations as new markets expand in the United States and Asia.
Crown Estate’s auction for seabed plots in England and Wales guaranteed the Treasury and monarch total bills of 879 million pounds, consistent with the year of development of the wind farm consistent with the 10-year wind farm. This would give the Queen a consistent percentage of nearly 220 million pounds a year to manage the official royal space and pay for the maintenance of Buckingham Palace.
Roseanna Cunningham, secretary of the Scotland Government’s Office for Environment and Climate, said: “Despite the adjustments we’re seeing lately in the UK offshore wind market, ministers have agreed with Crown Estate Scotland that it would be wise to review our leasing process. “»