Crown Estate to announce £100bn wind energy programme in UK

The Crown Estate will announce which consortia have been successful in bidding to develop the nine zones, mostly in the North Sea, in the wind power project, which is the most ambitious of its kind in the world. The prime minister is expected to use the event to promote the potential economic benefits of the massive building works. Bidders, which include the UK’s big six energy suppliers, are being judged on their financial resources, expertise and safety record.

The wind energy projects will be bigger than anything which exists today in the UK or elsewhere. They will be further away from the coast and in deeper waters than existing offshore projects, making them more difficult and expensive to build and operate.

The biggest zone is at Dogger Bank, about 100km off the north east coast, where wind farms with a capacity of 10 GW are planned, at an estimated cost of more than £30bn. The British Wind Energy Association (BWEA) estimates it will create up to 60,000 jobs.

Successful applicants will carry out further scoping work to decide where exactly to build the wind farms before submitting planning applications. Construction is not expected to start until 2014 at the earliest. A consortium including the U.K. unit of RWE AG (RWE.XE), Scottish and Southern Energy PLC (SSE.LN), and Norway’s Statoil (STL.OS) and Statkraft are thought to have won the giant Dogger Bank zone, 100 kilometers off the east cost, the newspaper reported.

Iberdola SA’s (IBE.MC) U.K. subsidiary Scottish Power and Sweden’s state-owned Vattenfall are believed to have won a 5-gigawatt parcel off the Norfolk coast. Aberdeen firm Sea Energy and partner Portuguese utility EDP (EDP.LB) are thought to have been awarded a site in the Moray Firth in Scotland. Mainstream Renewable Power, E.ON AG (EOAN.XE) and Centrica PLC (CNA.LN) have also won parcels.

A spokeswoman for the Crown Estate said the government body, which owns the UK’s seabed, was holding a supply chain roadshow for British manufacturers around the country, starting later this month. Working with regional development authorities, companies will be informed what components will be needed by the energy companies to help British industry benefit from the construction programme.

The Crown Estate announced the dates of a series of twelve UK supply chain events for the offshore wind industry. This developing industry is creating some of the largest infrastructure projects in the world with a potential market investment of over £100 billion. With this comes the prospect of tens of thousands of jobs and a significant boost to the UK economy.

These events will be delivered regionally through a working partnership of The Crown Estate, the UK Government and the devolved governments in Scotland, Wales and Northern Ireland.

The UK dates are:

* Aberdeen 28 January 2010 (Scottish Enterprise)
* Inverness 2 February 2010 (Highlands and Islands Enterprise)
* Glasgow 4 February 2010 (Scottish Enterprise)
* Pembrokeshire 11 February (Welsh Assembly Government)
* Chester-Le-Street 17 February 2010 (One North East)
* Gatwick 23 February 2010 (South East England Development Agency and EnviroBusiness)
* Loughborough 25 February 2010 (Advantage West Midlands and East Midlands Development Agency)
* Doncaster 26 February 2010 (Yorkshire Forward)
* Lowestoft 4 March 2010 (East of England Development Agency)
* Bristol 9 March 2010 (South West RDA and Regen South West)
For registration and tickets please visit the Regen SW site: click here
* Liverpool 11 March 2010 (North West Development Agency and Envirolink Northwest)
* Belfast 16 March 2010 (Invest NI)

These events will act as a ‘marketplace’ to enable all those involved in developing offshore wind sites to do business. A single region cannot deliver the requirements to support the scale of development alone; these events will create the opportunity for local and regional companies to do business right across the UK.

The supply chain is in the broadest sense all the elements that will contribute to offshore wind energy deployment including: components; skilled workforce; infrastructure; also the regulatory environment. It is essential for supporting the deployment of offshore wind to deliver ambitious UK renewable energy targets. This is a huge opportunity for the regions and businesses of the UK to play a role in providing new jobs, inward investment and to ensure that we remain the world leader in offshore wind deployment. The anticipated scope of growth is akin to the oil and gas service industry.

The potential for growth in the job market is significant; research by The British Wind Energy Association (BWEA) estimates that the UK wind industry jobs will be in the region of 57,000 by 2020, a significant growth from 5,000 in 2008. In addition, The European Wind Energy Association (EWEA) estimates that the number of jobs in the EU wind industry will more than double from 154,000 to 325,000 by 2020, which could lead to significant opportunities for the UK to export expertise internationally.

Renewable energy is central to the government’s objectives to secure diverse energy supply and to reduce carbon dioxide emissions by 60% by 2050. The government has set a target to generate 10% of our electricity supply from renewable sources by 2010. With onshore wind farms already making a considerable contribution in the UK, the new horizon for larger scale development lies offshore.

Offshore wind power is a new activity for The Crown Estate and areas of seabed have been made available through two rounds of development. By efficiently harnessing the wind to generate electricity, these developments will play a major role in helping the UK government to deliver its targets.

A New Industry Emerges

The Crown Estate announced the first round of UK offshore windfarm development in December 2000. The response from potential developers was enthusiastic. In April 2001, eighteen companies successfully pre-qualified for site development options and to date five windfarms have been built: Barrow off the South Cumbrian coast, North Hoyle off north Wales, Scroby Sands off Great Yarmouth, Norfolk, Burbo Bank off The Wirral, and Kentish Flats in the Thames Estuary region, all of which are generating renewable energy. There are a number of others either under construction or planned for the near future.

Following the success of this first round and further development of government policy, the DTI requested The Crown Estate to announce a competitive tender process for a second round of larger sites in July 2003.

As landowner of the seabed and areas of foreshore by virtue of the Crown Estate Act 1961, The Crown Estate’s permission is necessary to place structures on or pass cables over the seabed and its foreshore. In addition to permission from the landowner potential developers also require statutory consents from a number of government departments responsible for the offshore wind development process. Only when all the necessary statutory consents are obtained will The Crown Estate grant a lease for development. We issue leases for the development of sites within the 12 nm (nautical mile) territorial limit, whilst the Energy Act 2004 gives us rights to issue leases for development beyond the territorial limit within Renewable Energy Zones (REZ) out to 200 nm. Round 1 full term leases are for twenty-two years with a further three years allowed for decommissioning. For the largest Round 2 projects the full term lease is for fifty years.

As with all development there are environmental considerations and potential impacts that need to be addressed. As part of the consenting process developers are required to submit environmental statements, following the completion of an environmental impact assessment. As a responsible landowner, The Crown Estate also supports research aimed at understanding and mitigating the impacts of offshore development. In 2001 we established COWRIE, a fund which commissions generic research specific to the offshore wind industry. Our marine communities fund, which is part of our programme of marine stewardship, also funds educational and community focused projects. Alongside COWRIE, BERR have set up a Research Advisory Group (RAG) which identifies and coordinates research undertaken by government departments.