£700m of Scottish offshore wind leasing awarded

Crown Estate Scotland on Monday announced the outcome of its application process for ScotWind Leasing — the first Scottish offshore wind leasing round in over a decade.

It said a total of just under £700 million will be paid by the successful applicants in option fees and passed to the Scottish Government for public spending.

It is the first leasing round since the management of offshore wind rights were devolved to Scotland.

Crown Estate Scotland said 17 projects have been selected out of 74 applications — and have now been offered option agreements which reserve the rights to specific areas of seabed.

Among the companies offered seabed rights to develop offshore wind projects are: Iberdrola’s Scottish Power Renewables, SSE Renewables, BP Alternative Energy Investments, Shell New Energies, Offshore Wind Power, Baywa, Ocean Winds, DEME and Falck Renewables.

ScottishPower said it has been awarded seabed rights for three offshore projects with total capacity of 7GW in the ScotWind Leasing — two large-scale floating projects in partnership with Shell and one solo fixed project.

It said the rights treble ScottishPower’s offshore wind pipeline to more than 10GW – with 5GW of that in partnership with Shell.

SSE Renewables said its ScotWind partnership with Japanese conglomerate Marubeni Corporation and Danish fund management company Copenhagen Infrastructure Partners (CIP) has been awarded the rights for 858 square kilometres of seabed.

SSE Renewables said the partnership — of which SSE owns a 40% share — won the rights to develop an offshore wind project of up to 2.6GW of capacity off the east coast of Scotland.

The area of seabed covered by the 17 projects is just over 7,000km2.

“Initial indications suggest a multi-billion pound supply chain investment in Scotland …” said Crown Estate Scotland.

“The potential power generated will provide for the expanding electrification of the Scottish economy as we move to net zero …

“Should any application not progress to signing a full agreement, the next highest scoring application will instead be offered an option.

“Once these agreements are officially signed, the details of the supply chain commitments made by the applicants as part of their Supply Chain Development Statements will be published.

“This is just the first stage of the long process these projects will have to go through before we see turbines going into the water, as the projects evolve through consenting, financing, and planning stages.

“Responsibility for these stages does not sit with Crown Estate Scotland, and projects will only progress to a full seabed lease once all these various planning stages have been completed.”

Crown Estate Scotland CEO Simon Hodge said: “Today’s results are a fantastic vote of confidence in Scotland’s ability to transform our energy sector.

“Just a couple of months after hosting COP26, we’ve now taken a major step towards powering our future economy with renewable electricity.

“In addition to the environmental benefits, this also represents a major investment in the Scottish economy, with around £700m being delivered straight into the public finances and billions of pounds worth of supply chain commitments.

“The variety and scale of the projects that will progress onto the next stages shows both the remarkable progress of the offshore wind sector, and a clear sign that Scotland is set to be a major hub for the further development of this technology in the years to come.”

First Minister Nicola Sturgeon said: “The scale of opportunity here is truly historic.

“ScotWind puts Scotland at the forefront of the global development of offshore wind, represents a massive step forward in our transition to net zero, and will help deliver the supply chain investments and high quality jobs that will make the climate transition a fair one.

“It allows us to make huge progress in decarbonising our energy supply – vital if we are to reduce Scotland’s emissions – while securing investment in the Scottish supply chain of at least £1 billion for every gigawatt of power.

“This will be transformational.

“And because Scotland’s workers are superbly placed with transferable skills to capitalise on the transition to new energy sources, we have every reason to be optimistic about the number of jobs that can be created.

“That means, for example, that people working right now in the oil and gas sector in the North East of Scotland can be confident of opportunities for their future.

“The spread of projects across our waters promises economic benefits for communities the length and breadth of the country, ensuring Scotland benefits directly from the revolution in energy generation that is coming.

“The scale of opportunity represented in today’s announcement exceeds our current planning assumption of 10GW of offshore wind – which is a massive vote of confidence in Scotland.

“So we will now embark on the rigorous consenting process required to make sure we can maximise the potential that clearly exists in offshore wind while also ensuring that the impacts of large scale development — including on other marine users and the wider natural environment – are properly understood and addressed.

“While it is not yet possible to say with certainty what the scale of development will ultimately be, there is no doubt that the scale of this opportunity is transformational — both for our environment and the economy.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.