Crown Estate Scotland has announced the winners in the ScotWind ‘clearing round’ that was announced following the outcome of its application process for ScotWind leases
Clearing saw the ‘NE1’ area east of Shetland made available for ScotWind applicants who met the required standards but who did not secure their chosen location earlier in the leasing process.
Fourteen applications were received and three projects led by Ocean Winds (500 MW), Mainstream Renewable Power (1.8 GW) and ESB Asset Development (500 MW) have been selected and offered an option agreement.
The three projects’ initial supply chain commitments indicate an average £1.2Bn (US$1.4Bn) investment in Scotland per GW of capacity built
A total of £56M will be paid by the successful applicants in option fees and passed to the Scottish Government for public spending. Projects are currently expected to pay Crown Estate Scotland £4M per GW per year once operating – this would also be paid to Scottish Government.
The area of seabed covered by the three projects is just over 560 km2 from a total of 751 km2available in the NE1 area.
Crown Estate Scotland director of marine Colin Palmer said, “This is a fantastic result for Shetland and for Scotland. These projects have significant potential to really boost Scotland’s progress towards its net-zero targets, including in relation to the opportunity around green hydrogen.
“This result is further proof that Scotland is leading globally on offshore wind, deploying new technology and exploiting the potential of hydrogen.”
First Minister Nicola Sturgeon said, “ScotWind will deliver a new era in Scotland’s offshore wind industry, representing the world’s largest commercial round for floating offshore wind and breaks new ground in putting large-scale floating wind technology on the map at gigawatt scale. It will provide several billion pounds more in rental revenues once projects become operational, to be invested for the benefit of the people of Scotland.
“The importance of accelerating the transition to renewable energy sources, including hydrogen, has been brought into sharp relief by Russia’s invasion of Ukraine and the cost of living crisis. In Scotland, nearly 100% of our net electricity demand already comes from renewable sources and we are focused on reducing energy demand and accelerating the deployment of renewable energy.
“The Scottish Government sees offshore wind – and the hydrogen production which we hope will be enabled by offshore wind – as one of the most important economic and environmental opportunities we have.
“It can reduce our carbon emissions, improve our energy security, and create tens of thousands of high-quality jobs. It will bring benefits for all of Scotland – but it will be especially important in the northeast, and a crucial part in the transition from being the oil and gas capital of Europe, to being one of the net-zero capitals of Europe.”
Once agreements are officially signed later in 2022, information on supply chain commitments made by the applicants as part of their Supply Chain Development Statements will be published.
This is the first stage of the process the projects will go through before we see turbines in the water, as the projects progress 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.
The announcement came as an offshore wind supply chain summit is held in Aberdeen with Sir Ian Wood, chaired by Michael Matheson MSP, Cabinet Secretary for Energy, and including a keynote address by First Minister Nicola Sturgeon MSP.
