The Crown Estate announced on 4 June 2008 the launch of Round 3 of the UK offshore wind development programme, which aims to deliver up to 25GW of additional offshore wind energy generation capacity in the UK by 2020. This announcement, which is designed to assist the UK in meeting its share of the EU’s target of sourcing 20% of energy from renewable sources by 2020, will be of interest to energy companies, financiers, and other stakeholders in the wind industry supply chain keen to get involved in the development of offshore wind in the UK.
Key features of Round 3
The Crown Estate highlighted the following key features for Round 3:
- the development of offshore wind farms would be undertaken through exclusive zones (11 zones have been provisionally identified) which would have been identified as economically viable for wind farm development, subject to the Government’s ongoing Offshore Energy Strategic Environmental Assessment (‘SEA’);
- each exclusive zone may contain several offshore wind farm sites;
- there will be a single partner company with exclusive development rights for each zone (either an individual company or a consortium) which would enter into an exclusive zonal development agreement with the Crown Estate, following a competitive tender process. Special Purpose Companies (SPCs) would then be responsible for the development and operation of individual sites within each zone;
- the Crown Estate would fund up to 50% of the cost of obtaining planning consents for wind farm sites, including the funding of enabling works;
- responsibilities would be clearly delineated in each zone with partner companies being responsible for securing planning and other relevant consents for each wind farm site as well as other key contracts (such as operational and financing contracts), whilst the Crown Estate would provide the lease agreement for each site in addition to supporting the site development activities; and
- the Crown Estate will seek to facilitate offshore wind development by in particular commissioning an initial study of technical options and indicative costs for various offshore grid connection models in the proposed development zones and engaging stakeholders to identify key risks and competing interests in offshore marine development.
Timescales
The timescales proposed by the Crown Estate for the Round 3 programme are as follows:
| Key Dates | Key Milestones | Phase in Round 3 |
| July and August 2008 | 2 workshops engaging stakeholders, including seminars with the offshore wind industry and publication of a Prior Information Notice in the EU Official Journal | 1
(Enabling work leading to a competitive tender for Zonal development) |
| Start of August 2008 | Invitation to submit Expressions of Interest by potential Zone Partner (and notice in the EU Official Journal) | 1 |
| End of August 2008 | Closing date for Expressions of Interest | 1 |
| Late September 2008 | Release of Invitations To Negotiate (‘ITN’) and key contracts | 2
(Selection and contracting or Partner and Site Identification) |
| 2009 | Development Allocation post- SEA | 2 |
| Q1 2009 | Responses to ITN and submission of bids | 2 |
| Q2 2009 | Shortlist of Partners and SEA | 2 |
| Q4 2009 | Completion of awards to Zone Partners | |
| 2010-2013 | Development – Crown Estate jointly invests up to 50% of consenting costs;SPCs formed by Partners | Phase 3
(Consents and Contracts) |
| 2013 | Site consents | 3 |
| 2014 | Site construction by SPCs | 4
(Construction) |
| 2018 | First site completion | 5
(Operation) |
| 2020 | 25GW delivery target | 5 |
Next steps for developers
The Crown Estate is to hold 2 workshops in July 2008 for stakeholders interested in taking part or supporting the development of offshore wind farms in Round 3. Companies interested in taking part in a partner company for an exclusive zone must submit their Expressions of Interest and other specified information by the end of August 2008. Successful applicants will receive an ITN in late September 2008, leading to a submission of bids towards the end of the first quarter of 2009.
To access the Crown Estate’s press release, please click here.
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