Celtic Sea Floating Wind update from The Crown Estate

The Crown Estate (TCE) provides further information on “Offshore Wind Leasing Round 5” structure and proposed leasing programme.

“Welcome to Round 5 in the Celtic Sea”

The opportunities to exploit new seabed areas thanks to floating wind has been a key feature of ScotWind, and Round 5 (officially) will add further vital capacity to get to 5GW of floating offshore wind by 2030. The challenges of delivering innovative, nascent technology at commercial scale are significant.

TCE has issued its much anticipated guidance on the proposed tender process, leasing programme and structure for the Celtic Sea floating offshore wind leasing round which is expected to launch following publication of an Information Memorandum towards the back end of this year.

Following extensive engagement with stakeholders, TCE have also shared their “minded to” design position and focussed on the particular challenges of a concentrated spatial approach. 

The four project development areas (“PDAs”) have now been revealed and these are being billed as in the “sweet spot” of the Celtic Sea closest to Pembrokeshire:- with good wind resource, decent seabed and close to grid and port connections; however there is less space than had been anticipated.

The Celtic Sea is a highly used sea space by comparison to the North Sea and the ScotWind zones, with significant constraints due to commercial and passenger shipping, defence interests, aviation radar and existing infrastructure.  The indication and expectation will be that TCE have considered all of these constraints in getting this far and have identified deliverable zones which will – hopefully - lead to a smoother and speedier consenting process and de-risk these innovative projects as much as possible ahead of time.

Notwithstanding the spatial constraints, TCE think 4GW is attainable from this leasing round but the expected technical perimeters mean that they have asked two key questions from their customers:  

• How attractive is the minded-to proposition based on the PDAs?
• What novel risks are thrown up?

No further guidance will be issued until that feedback has been received.

What were the key takeaways?

TCE’s presentation of its proposals was a broad, information dense session (which can now be watched here). Key takeaways as follows:

• Up to four PDAs to be won by a minimum of 3 bidders
• PDAs can be developed as phased sites
• The outer boundaries of the PDAs / areas of search are fixed. There will be a small 1km buffer zone between each of the 4 PDAs. Close location and small areas means projects will be denser. There are going to be “turbine exclusion zones” – no turbines within 500m of the buffer of the PDA. This ensures 2km minimum between turbine tips. The anchors must be 1km apart
• Given the nature of the technology and the need to “float” the turbines out to sea there is a huge focus on bidders demonstrating their port management strategy and continency plans, as this will be key to delivery
   
• Likewise TCE will be looking for assurances that supply chains for this nascent technology can be managed at scale
• Big focus on the social value question set with projects to demonstrate their environmental and social impact. This will be pass/fail
• Ascending clock auction with reserve price proposed with pricing changes published after each round completes. The requirements at the ITT1 stage to evidence ports readiness and supply chain/social value commitment indicate that TCE is taking more of a qualitative approach than was the case in Round 4 which was ultimately about highest bids; however these aspects will be taken into account at ITT stage rather than (as for ScotWind) as an integral part of the main bid, with highest bids still being decisive in the final ITT2 stage.

 

What else do I need to know?

TCE were at pains to give assurances about grid; however this will continue to be a key concern for bidders given the difficulties this is causing for R4 and ScotWind projects.

It is also helpful for bidders that TCE is undertaking a Plan-Level Habitats Regulations Assessment process ahead of the market tender. In Round 4, HRA assessment was completed after the bid stage, and this represented a significant risk for bidders and also created delay between award of preferred bidder status and the signing of seabed agreements for lease. Removing that delay and risk from the Celtic Sea projects will be welcomed by developers.

The pressing question for all developers and consortia is - when…? In the words of Tim Stiven (Sector Lead, Floating Wind for TCE) on forward timeline, TCE know that big industry players have “serious business to transact and a whole world’s worth of opportunities” but also, given the unique challenges and potential prize, want to get this right.

 

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