UK holds $25bn offshore wind farm auction, the first in a decade

The four new bidding areas have a combined potential to host 7-8.5 gigawatts of electricity generation.

UK offshore wind turbines
The UK's latest round of licensing for offshore wind is the first in 10 years, with established renewable energy companies and oil majors expected to bid [File: Chris Ratcliffe/Bloomberg]

The United Kingdom has launched its first major auction of offshore wind farm leases in a decade, offering sites with the combined potential to power more than six million homes.

The UK is already the world’s largest offshore wind market and plans to generate a third of its electricity from the technology by 2030 as part of efforts to reach its 2050 net-zero carbon emissions target.

The Crown Estate’s so-called fourth leasing round is expected to attract bids from established offshore wind developers as well as European oil majors, under pressure from shareholders to show how they plan to align their businesses with global efforts to cut emissions.

Energy giant Shell said earlier this year in an interview with Reuters it would take an “active role” in the tender.

Crown Estate, which acts as manager of the seabed around England, Wales and Northern Ireland said in a statement on Thursday that four broad areas of seabed would be made available to the market.

Combined, the sites have the potential to host a total of 7 gigawatts (GW) to 8.5 GW of electricity generation. The contest is intended to draw as much as 20 billion pounds ($25bn).

They will be built in the Dogger Bank Bidding Area, Eastern Regions Bidding Area, South East Bidding Area and Northern Wales and the Irish Sea Bidding Area.

Companies will assess the areas available and then present their proposals for project sites.

Crown Estate will then asses the viability of the proposals, with the tender process beginning in October and expected to take about 12 months.

The first seabed rights could be awarded in early 2021, Crown Estate said.

Its last major licensing round for offshore wind took place a decade ago, with winners including Britain’s SSE and Norway’s Statkraft announced in early 2010.

The UK currently has about 9.3GW of operational offshore wind capacity, with approximately 8 percent of the country’s electricity coming from offshore wind in 2018.

It is also host to the world’s largest fully operational offshore wind farm: Orsted’s 659 megawatt Walney Extension project.

Crown Estate Scotland is also set to launch an offshore wind seabed licensing round for sites off the Scottish coast in October.

Source: News Agencies

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