Seabed landlord announced plans to carry out review of 'option structure' of scheme after 'unprecedented outcome' of the Crown Estate's latest leasing round in England and Wales
Crown Estate Scotland has pushed back the deadline for applications for its offshore wind leasing action, citing the need to review the scheme in light of 'unprcedented' results from Crown Estate UK's recent auction of English and Welsh offshore wind sites.
The seabed landlord said yesterday it had extended the deadline for applications beyond the 31 March in order to carry out a review of the "option structure" of the ScotWind leasing process.
Industry groups have condemned the move, noting that companies hoping to bid in the auction would be "intensely frustrated" by the decision, which is already running more than a year behind its original schedule.
Crown Estate Scotland said a new deadline will be confirmed once the option structure review has been completed, predicting the process would wrap up by 24 March 2021.
The record bids recorded through Crown Estate UK's Leasing Round 4 process for sites in England and Wales earlier this week had prompted it to re-evaluate its own scheme to ensure it was not under-pricing its Scottish sites, it said.
"The unprecedented outcome of The Crown Estate Round 4 process has, overnight, changed the market dynamics around offshore wind leasing, and could have significant implications for offshore wind development in Scotland," said Crown Estate Scotland chairwoman Amanda Bryan. "It is only right that we consider the implications of this new situation in relation to ScotWind Leasing."
"It is the Scottish Government's responsibility to secure a fair price for the sea bed sites being leased for offshore wind developments around Scotland and to make sure that the people of Scotland benefit fully from decisions taken in relation to the Scottish Crown Estate," she added.
The auction wrapped up by Crown Estate UK earlier this week saw a number of oil and gas firms pay premiums to have the option of developing sites around England and Wales, in a record-breaking leasing round that will see unprecedented revenues flow from wind farm assets into the coffers of the Treasury and Royal Family. However, some industry insiders have raised concerns the record bids could result in higher costs for developers and energy consumers.
Crown Estate Scotland's decision has been supported by the Scottish Government. Roseanna Cunningham, cabinet secretary for environment, climate change and land reform, said Scottish ministers had agreed it would "sensible" to fully consider the implications of the outcome in England and Wales before launching the ScotWind auction.
But the decision to delay the process has been met with fierce criticism by industry leaders, who warned the delay to Scotland's first offshore leasing scheme would damage investor confidence and hurt Scotland's standing as a leader in the global wind energy sector.
Deputy chief executive of RenewableUK Melanie Onn accused Crown Estate Scotland of "rewriting the rules at the eleventh hour" after spending more than a year finalising the process for new leases.
"Scotland has a unique opportunity to secure billions of pounds of investment in new renewable energy projects which will support thousands of jobs across the supply chain," she said. "Delays and U-turns are bad for investor confidence and for Scotland's position as a world leader in offshore wind".
And Scottish Renewables chief executive Claire Mack said companies would be "disappointed and intensely frustrated" by the further postponements to the already-heavily delayed leasing scheme.
"It is vital now that the scope of this review is as focussed as possible, and that any delay to the overall process is minimised in order to reduce uncertainty for industry," she said. "Scotland is already disadvantaged by its tougher seabed conditions and the higher electricity transmission charges projects here face. If offshore wind is to deliver on its potential for job creation and economic development in Scotland it is imperative that the processes through which this low-cost, reliable technology is deployed are as straightforward, and progress as rapidly, as possible, and we would urge Crown Estate Scotland and The Scottish Government to proceed quickly with that in mind."
The delay to the programme comes in the same week that utility ScottishPower and Global Energy Group inked a deal to explore the feasibility of producing and using green hydrogen at the Port of Nigg, north of Inverness. The agreement will see the partners explore whether green hydrogen developed at the port can be used to power the machinery and vehicles on the site, as well as the manufacturing of offshore wind components.
Commenting on the announcement, Scottish energy minister Paul Wheelhouse said the project would help put Scotland at the forefront of the nascent hydrogen sector. "This project opens a window for us into how hydrogen can be viewed as playing an integrator role in our energy and industrial systems," he said. "I recognise that it is crucial that Scotland and Scottish companies benefit fully from our development of hydrogen. Scottish content will be central to the sustainable growth of this new sector and the development of our supply chain will play a critical role in shaping and defining our approach to the hydrogen action plan."
The Scottish government published a hydrogen action plan in late December that sets out its mission to generate 5GW of hydrogen by the end of the decade.
In further Scottish clean energy news, UK Export Finance announced this morning it has helped Glasgow-based energy equipment manufacturer PCT Group Sales secure a £3m contract to supply construction equipment for a wind farm planned off the coast of Fife.
PCT Group won a global tender to supply 54 cranes that could produce wind turbines for the new 450MW Neart na Gaoithe offshore wind farm after securing support from UKEF's bond support scheme, the government agency said.