EDPR and SeaEnergy Renewables Limited (SERL) (the 80%-owned subsidiary of SeaEnergy) have formed Moray Offshore Renewables Limited (MORL) to develop the zone, and the agreement provides SERL with the right to retain a 25% working interest in MORL and all designated wind farm developments within the zone, whilst EDPR holds a 75% interest.
The companies have been awarded the exclusive rights to develop wind farm sites within the zone under the terms of the development agreement, signed by EDPR, SERL and The Crown Estate.
Other successful site bidders announced in the UK Round 3 awards included major European utilities such as RWE AG, E.ON AG, Centrica PLC, Scottish and Southern Energy PLC, Iberdrola SA, Vattenfall, EDP Renovaveis, and others such as Statoil, Siemens AG, Mainstream Renewable Power and Fluor.
The announcement of these successful bidders demonstrates that the UK’s offshore wind market is moving beyond government rhetoric and becoming real, and that electricity generated from offshore wind is critical for the UK both to ‘keep the lights on’ and meet its EU 2020 targets.
The next phase of MORL’s site development is expected to take at least 24 months, ahead of planning consents which should be submitted in early 2013.
SeaEnergy’s carried interest model could limit the construction capital it is required to spend. Under this model, SeaEnergy is obliged to pay its full share (25%) of development costs through until the stage of producing electricity; however, it has the option to attract larger partners to fund the final stage of more expensive development and construction costs in exchange for a smaller – but more valuable – carried interest, or to develop ‘to term’ itself.
This resounding success caps a week of positive announcements for SeaEnergy, following its SOCAR arbitration settlement which netted the company US$4.9m to be used for working capital and project development investment. Importantly, this announcement also affirmed the intent of SeaEnergy to divest itself of its oil and gas interests to become a pure-play renewable energy company.