The zones identified by the Crown Estate (map) range in size from those able to accommodate around 500 MW up to the largest -- Dogger Bank in the North Sea more than 100 kilometres off the north-east of England -- with an indicative capacity for around 9 GW. A licence will give the successful bidder the exclusive rights to development within a zone. A crucial factor in Round 3 is the Crown Estate's involvement as a development partner, shouldering 50% of the substantial development costs in each of the zones.
Players in Round 3 will have to demonstrate their financial strength, development capability and resources to be able to deliver the scale of projects required. While some bidders are still playing their cards close to their chest, a number have been more open about their participation. Of these, most are large European utility companies already active in the offshore sectors, with the exception of Portugal's EDP, a utility newcomer. But two are independent wind power producers looking to challenge the utility dominance of the UK offshore market, Germany's WPD, going it alone, and Britain's Renewable Energy Systems, which has rekindled the partnership it forged with Centrica for the first two rounds of UK offshore site licensing.
Among the big utility consortiums is Forewind, a consortium of four giants: Scottish and Southern Energy subsidiary Airtricity, RWE npower renewables (the UK arm of Germany's RWE Innogy), and two of Norway's largest companies, Statkraft and StatoilHydro. The consortium is bidding for a number of zones. Airtricity and RWE npower renewables both operate offshore wind farms around the British Isles, Statkraft has been tentatively increasing its presence in UK onshore wind, while StatoilHydro brings solid offshore oil and gas expertise to the group.
Forewind project manager Peter Raftery says the consortium draws on exceptional organisational resources, financial strength, technical knowledge and a track record of offshore delivery. "Each of the four partners -- all leading players in their own right -- recognise that by joining forces we have a unique ability to both make a significant contribution to the future of wind energy in the UK and demonstrate our commitment to the continuing development of offshore wind," he says.
One of the first partnerships to come out in the open was Iberdrola subsidiary ScottishPower and Vattenfall of Sweden, with a stated aim of delivering 6 GW in Round 3. Vattenfall already operates offshore wind farms in British, Swedish and Danish waters and has over 500 MW of offshore projects under construction or in development around the UK. ScottishPower recently received the go-ahead for its first offshore wind farm.
Another pairing of giants is Dong Energy of Denmark and German E.ON, which have teamed up with Fred Olsen Renewables to bid for "thousands of megawatts" spread over a number of zones. The consortium members claim to have been involved in over 60% of the existing operational offshore wind farms around the world and are currently building five offshore wind farms with a capacity of 800 MW. Dave Rogers of E.ON points out that Round 3 will see wind farms being built further offshore and in much more challenging environments than ever before. "That's why we have, as a consortium, brought together companies with the financial ability and the experience of working on major on and offshore wind projects, as well as working in difficult offshore conditions in the oil and gas industry, to make this a success," he says.
A new utility to the UK offshore market is EDP Renewables (EDPR) of Portugal, a subsidiary of Energías de Portugal, which lays claim to be the world's fourth largest wind energy company. Its renewables division has joined forces with SeaEnergy, a Scottish-based marine renewables company founded in 2008 and 80% owned by Aberdeen energy investment company Ramco Energy with SeaEnergy's management holding the remaining 20%. With previous experience in the offshore oil and gas sector, the SeaEnergy team worked on the world's first two deepwater wind turbines at the Beatrice 10 MW demonstrator project off north-east Scotland. Steve Remp of Ramco comments: "The combination of EDPR's financial strength and global wind industry experience with SeaEnergy's proven track record installing turbines in deep water, provides the consortium with the credentials necessary for success."
Veteran German wind developer WPD is the only independent mounting a sole challenge to the utility dominance of Round 3. Claiming to be one of Europe's leading offshore developers, based mainly on its activity in Germany and Sweden, WPD is teaming up with American turbine maker Clipper Windpower. Clipper is developing a 10 MW turbine, with British aid, aimed specifically at the offshore market. The joint venture is bidding to develop 1350 MW in the Hastings zone off England's south coast -- the only consortium so far to specify publicly its Round 3 intentions.
WPD boasts an offshore wind pipeline of nearly 8 GW in Germany, Sweden, France Finland and Italy in addition to its 76 MW Baltic wind farm under construction off the north German coast. "The UK government and the Crown Estate expect the bidders to develop offshore wind farms successfully in a short period of time," says WPD Offshore's Achim Berge. "That is WPD's main competence, which we have proved over the last years via the successful development on five offshore wind farms in Sweden and Germany all being fully consented." Clipper is developing its offshore turbine in north-east England, making it the UK's only wind turbine technology. Last year the Crown Estate signed an agreement with Clipper for the purchase of its prototype turbine -- known as the Britannia -- designed for deep water.
The Crown Estate warns that realising the 25 GW is dependent on solving a number of issues, including redevelopment of the UK grid network for offshore wind power, the consenting process, supply chain development and economic support for the projects. Centrica, E.ON and RWE complain that the economics of offshore wind are at best marginal under current market conditions. The British Wind Energy Association is calling on the government for a package of increased support for wind--including loan guarantees--to maintain momentum in the sector.
Meantime, the Crown Estate is compiling a shortlist of companies for each zone. In the second half of 2009 it will begin negotiations with the preferred bidders--and it hopes to award exclusive licenses for the nine zones by the end of 2009.