Out-Law / Your Daily Need-To-Know

ScotWind seabed leases awarded to 17 successful projects

Out-Law News | 21 Jan 2022 | 5:35 pm | 1 min. read

Crown Estate Scotland has awarded seabed leases to 17 potential new offshore wind projects, following the first Scottish offshore wind leasing round in over a decade.

The successful bidders, selected from over 70 applicants, include major energy companies seeking to diversify, longer-standing offshore wind industry players and international renewables developers. They are proposing a mixture of fixed base and floating offshore wind projects. Successful bidders will pay just under £700 million in combined option fees, and each has committed to significant investment in the Scottish supply chain as part of their bid.

Energy expert Melanie Grimmitt of Pinsent Masons said: “This is Crown Estate Scotland’s first seabed leasing round and marks an important chapter for Scotland’s offshore market, but with proposed wind farms from the leasing round expected to save in excess of six million tonnes of carbon emissions, it is also an important milestone for the UK’s overall net zero commitments”.

Cutout portrait image of Melanie Grimmitt

Melanie Grimmitt

Partner, Global Head of Energy

Developers will be keeping an eye out to see if and how the application process and criteria for the next round might differ from this one given how popular and competitive it has been

“This leasing round has shown that there is significant appetite for investment borne out by the international and domestic, new and traditional developer groupings bidding to secure seabed rights in Scotland. Crown Estate Scotland is expected to progress to planning for a ScotWind 2 seabed leading round later this year, so developers will be keeping an eye out to see if and how the application process and criteria for the next round might differ from this one given how popular and competitive it has been,” she said.

Crown Estate Scotland manages the seabed leasing process on behalf of the Scottish government, which will receive the proceeds of the auction as well as future leasing fees. The allocated sites cover over 7,000 square kilometres (km2) of the maximum of 8,600km2 made available through the government’s sectoral marine plan.

The leasing round was paused last year to allow for a review by Crown Estate Scotland in response to high levels of interest and record bids for rights during the equivalent process in England and Wales. The maximum option fee payable was increased from £10,000 per km2 of seabed to £100,000 per km2 of seabed, while minimum supply chain commitments were also increased.

Crown Estate Scotland intends to publish details of each applicant’s supply chain commitments once the option agreements are officially signed. Should any application not progress to signing a full agreement, options will be offered to the next highest scoring application.

Successful developers will have to obtain the necessary consenting permissions before they can progress to a full seabed lease.