United Kingdom

United Kingdom

Crown Estate unveils leasing tender design

Seabed landlord the Crown Estate has confirmed it will launch its fourth leasing round for offshore wind sites off England, Wales and Northern Ireland later this year.

The Crown Estate will launch the three-stage tender later this year (pic credit: Innogy)
The Crown Estate will launch the three-stage tender later this year (pic credit: Innogy)

It announced a revised tender design for awarding rights to UK sites capable of supporting at least 7GW of offshore wind at an event attended by more than 100 industry representatives.

Developers will bid in a three-stage process — with a multi-cycle bidding process during the final stage — on an as-yet unspecified date before the end of 2019.

The Crown Estate has also not yet confirmed a full list of leasing zones. However, it had previously announced Dogger Bank, the southern North Sea and East Anglia, off England’s east coast; and the North Wales and the Irish Sea, off the UK mainland’s west coast, would be available.

It announced the new design after an 18-month consultation with stakeholders in the UK’s offshore wind industry.

Process and design

The allocation will be held over three phases. A pre-qualification stage will assess developers’ technical competence.

The Crown Estate will then carry out project-specific financial and technical assessments in a second stage of the tender.

It will then run a multi-cycle bidding process in the third stage to award projects in sequence through daily bidding cycles.

The seabed landlord claimed this would "increase transparency" by giving developers information about the price, location, and capacity of awarded projects at each stage.

"By moving to multiple bidding rounds for new offshore wind sites, the Crown Estate has recognised a more transparent process is needed to avoid adding unnecessary costs," said RenewableUK head of policy and regulation, Barnaby Wharton.

The Crown Estate has also redesigned the tender process to encourage more participants and to help incentivise innovation.

It will introduce an annual payment system to reduce the upfront capital requirement on developers, the Crown Estate explained, and help open the process to a wider pool of bidders.

Discounts will also be offered if developers trial new technologies, to help incentivise innovation.

Developers will still be allowed to bid as part of a consortium — enabling organisations can pool their capabilities and strengths.

However, organisations can only participate in one bidding entity rather than multiple, to mitigate risks of "information asymmetry", the seabed landlord explained.

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