Crown Estate Scotland delays offshore wind leasing application deadline

Out-Law News | 15 Feb 2021 | 5:00 pm | 2 min. read

Crown Estate Scotland has announced it is reviewing the option structure for the seabed leasing for offshore wind projects, and is also delaying the deadline for applications in that process known as ScotWind.

Crown Estate Scotland has announced it is reviewing the option structure for the seabed leasing for offshore wind projects, and is also delaying the deadline for applications in that process known as ScotWind.

The announcement follows the completion of round four of the equivalent auction process in England and Wales, which saw interest from major energy companies bidding record prices for seabed rights.

The result of the review of the option structure for ScotWind is targeted to be completed by 24 March 2021, meaning the deadline for applications will be pushed back from its original 31 March 2021 date. The application window opened on 15 January 2021.

Renewable energy expert Gareth Phillips of Pinsent Masons, the law firm behind Out-Law, said the decision would not be welcomed by industry, and could lead to some potential bidders pulling out of the process.

“Given the level of pricing we saw with round four earlier this week, it is perhaps unsurprising that Crown Estate Scotland has decided to take this approach, but it will not be welcome by those in the industry who have already planned budgets and spent significant resource on putting ScotWind bids together in time for the expected deadline of 31 March,” Phillips said.

“Not only has the programme been extended indefinitely, but it’s highly likely that we will see an increase in pricing that may push out some bidders and reduce the competitive tension. That is counterintuitive to the competition Crown Estate Scotland and the Scottish ministers were seeking to promote through ScotWind. As a result, at the very least, we will see many conducting reviews of whether they can proceed. Scottish ministers, who support the postponement, can expect their inboxes to fill rapidly as the offshore wind industry lobbying ramps up against this move,” Phillips said.

Crown Estate Scotland said the review would help ensure that the offshore wind leasing process attracted major green investment to Scotland by delivering long-term economic and net zero benefits through a competitive and sustainable pipeline of projects.

Crown Estate Scotland chair Amanda Bryan said the outcome of the round four auction had “overnight, changed the market dynamics around offshore wind leasing, and could have significant implications for offshore wind development in Scotland”.

Scotland’s secretary for environment, climate change and land reform Roseanna Cunningham said it was the government’s responsibility to secure a fair price for the seabed sites being leased.

ScotWind was launched in June 2020 and is the first round of offshore wind leasing in Scottish waters for a decade. Investors and developers can apply for an option agreement with Crown Estate Scotland, with successful applicants granted leases to build offshore wind farms in one of the areas of seabed identified as suitable in the Scottish government's sectoral marine plan for offshore wind.