Scottish offshore wind option fee ceiling rockets to reflect fierce competition – S&P Global

Highlights

Ceiling raised to GBP100,000/sq km

Reflects Round Four bidding behavior

Fees to fund Scotland's green recovery

New York Crown Estate Scotland has increased the ceiling on option fees payable on offshore wind seabed rights in the ScotWind Leasing competition from GBP10,000 ($13,711) per sq km to GBP100,000 per sq km, the property management body said March 24.

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Option fees are paid by successful bidders in exchange for securing seabed rights for offshore wind farms. A total 8,600 sq km of Scottish seabed is potentially available for such development.

"Funds [raised from the leasing] will be returned to the Scottish government for public spending to drive the green recovery and help deliver government priorities," the estate said.

Additional technical information on the first ScotWind Leasing round is to be published by the end of April, allowing registered applicants to progress their bids, the estate said. Applications close on July 16, 2021.

The current leasing round was suspended in February while Scottish ministers and the Crown Estate examined the extraordinary results of Round Four leasing in England and Wales, where the lowest bid came in at GBP76,200/MW per annum and the highest at GBP154,000/MW per annum.

The round, concluded Feb. 8, saw the Crown Estate awarding concessions to nearly 8 GW of offshore capacity to six developers, who committed GBP879 million ($1.2 billion) in option fee deposits alone.

The sums prompted sector association RenewableUK to warn of rising costs for developers and consumers due to fierce competition for the offshore wind concessions.

Crown Estate Scotland launched this current round of offshore wind leasing in June 2020, with a draft target of up to 10 GW installed.

The round could attract investment of more than GBP8 billion, the estate said.

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Scottish offshore wind option fee ceiling rockets to reflect fierce competition - S&P Global