Scottish seabed windfarm auction to fetch windfall profit of £860Mn

Scottish seabed windfarm auction to fetch windfall profit of £860Mn

by Pranali Mehta

The Scottish government is reportedly set to gain up to £860 million profits from an upcoming auction of over 8,600 square km of the country’s seabed plots for windfarms, after raising the limit on maximum bids.

Crown Estate Scotland had reportedly planned to cap the amount that the developers could offer for a seabed lease at £10,000 per square km, however, based on the new rules, the bidding can now be raised to a maximum £100,000 per square km.

Denmark based energy major, Ørsted, is reportedly one the companies that will be competing in the auction for the seabed plots that are sufficient to develop windfarms capable of powering every household in Scotland and saving over 6 million tons of carbon dioxide annually.

Apparently, the decision of raising the cap came after the auction conducted by the crown estate generated up to £9 billion over the next decade from energy firms like BP, who are looking to building turbines along England and Wales coasts.

Sources have confirmed that the unparalleled bids were five times higher than estimated for certain plots. Considering the outstanding auction results, the Scottish property manager agreed with the Scottish ministers on delaying their bidding while they reviewed the rules.

For the uninitiated, in England and Wales, successful developers need to pay the winning bid to the crown estate annually in the form of rent while developing the windfarm. In Scotland, the sum is payed as one-time fee for securing the lease.

Crown Estate Scotland reportedly handles the UK Queen’s property, however, unlike the crown estate that manages the property across the UK, it does not return the revenues to the Queen or the Treasury. Rather, the profits are directed to the Scottish Consolidated Fund, which subsequently finances the Scottish government.

Meanwhile, Scotland’s energy minister, Paul Wheelhouse stated that the higher cap balances the rising value and demand for Scotland’s seabed with the need to establish a strong supply chain of offshore wind which can enable the country’s green recovery from the pandemic and help attain the net zero goal.

Source credit: https://www.theguardian.com/environment/2021/mar/24/scottish-seabed-windfarm-auction-set-to-bring-in-860m

 

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writRead more...