The Crown Estate (TCE) announced that it has signed Agreements for Lease for six offshore wind projects which could begin to generate around 8GW of green electricity by 2030, enough for more than seven million homes.

Three of the six projects are located off the North Wales, Cumbria and Lancashire coast, and three are located in the North Sea off the Yorkshire and Lincolnshire coast. The agreements are the culmination of TCE’s Offshore Wind Leasing Round 4, with The Crown Estate having now awarded rights totalling 41GW across all previous rounds. Britain has the world’s largest fleet of offshore wind farms outside China.

Minister for Energy and Climate Graham Stuart said:

“Britain’s position as the European leader in offshore wind shows no signs of letting up. These six projects demonstrate how areas across the UK can contribute to ensuring Britain meets its world-leading ambition of deploying up to 50GW of offshore wind by 2030.

Julie James, the Welsh Government’s Minister for Climate Change, said:

“We have a high level of ambition for the sector, and we are looking to maximise the employment opportunities across the supply chain and continue to work with The Crown Estate to deliver on our ambitions”.

Strategic environmental compensation

TCE will lead a programme of work to oversee the development of strategic environmental compensation plans for two protected sites. This is a commitment to ensure that measures are put in place to offset the predicted impacts on the Dogger Bank SAC and the Flamborough and Filey Coast SPA.

TCE will establish a Steering Group for each of the protected sites, comprising government and statutory nature conservation bodies and the relevant project developers, which will drive the development of the detailed plans to ensure appropriate delivery of the commitments made by TCE through its plan-level Habitats Regulation Assessment.

“Record fees for ocean floor space add to cost of offshore wind”

Under the Agreements for Lease, TCE receives an annual option fee from each project developer, until they are ready to enter a lease for the seabed site. The total commitment across all six projects is approximately £1bn per year.

The high fees for seabed add another cost, along with higher wind turbine prices and rising interest rates, that could make it harder to finance the next generation of giant wind farms or make their power more expensive for consumers, Bloomberg [paywall] reported.

Simultaneously, King Charles has asked for profits from the windfarm deal to be used for the “wider public good” rather than as extra funding for the monarchy. Under the taxpayer-funded sovereign grant, the king receives 25% of the crown estate’s annual surplus, which includes an extra 10% for the refurbishment of Buckingham Palace.

A Buckingham Palace spokesperson said: “In view of the offshore energy windfall, the keeper of the privy purse has written to the prime minister and the chancellor to share the king’s wish that this windfall be directed for wider public good, rather than to the sovereign grant, through an appropriate reduction in the proportion of crown estate surplus that funds the sovereign grant.”

Political pressure on seabed ownership

The £1bn windfall has increased scrutiny on TCE’s ownership of the seabed.

In a letter to Sir Michael Stevens, Keeper of the Privy Purse, Ms Saville Roberts, the MP for Dwyfor Meirionnydd, said that ‘given the King’s support for profits to be directed for the “wider public good”, and that environmental matters and natural resources are devolved matters, that the Palace should consider directing the money to the people of Wales, via the Welsh Government, rather than to the UK Treasury.’

The MP introduced a Private Member’s Bill, the Crown Estate (Devolution to Wales) Bill, in the 2021-22 parliamentary session.

This letter follows closely on from questions in the Commons about the supply chain and employment benefits to Wales of the forthcoming Celtic Sea leasing round.

The former Green Party MEP, Molly Scott Cato reconfirmed in the Guardian that ‘Green party policy is that the crown estate should be considered as part of the national commonwealth and the value accruing from its leasing should be channelled into a green sovereign wealth fund.’ She went on to say: ‘I have long been critical of the weird anachronism that means the crown estate, the monarch’s property portfolio, owns, and has the right to lease, the whole of the seabed around our coast.’

Further information and resources

The news of the King’s request and the announcement from TCE has been extensively covered in the press. Reports can be found here from: the Times [paywall], Guardian, BBC, Bloomberg [paywall] and HuffPost, among others.

The full press release from the Crown Estate can be read here.