UK Round 4 Offshore Wind Winners To Start Paying Option Fees With Lease Agreements Now Signed
The title of this post, is the same as that of this article on offshoreWIND.biz.
This is the sub-heading.
The Crown Estate has signed Agreements for Lease for all six offshore wind projects selected in the UK’s Round 4 offshore wind seabed leasing. This enables the developers to now further progress their plans and also kicks off the period in which they will be paying annual option fees of almost GBP 900 million to The Crown Estate and HM Treasury.
The article then lists the wind farms.
- RWE’s Dogger Bank South East & West (3 GW).
- EnBW and BP’s Morgan and Mona (3 GW).
- TotalEnergies and Corio Generation’s Outer Dowsing (1.5 GW).
- Cobra and Flotation Energy’s Morecambe (480 MW).
This is just under 8 GW.
The article then goes on to show what developers will pay to the Crown Estate.
These two paragraphs explain the fees paid.
By signing the Agreements for Lease, which can be in effect for a maximum of ten years, the developers have committed to at least three years of option payments and will pay an annual option fee for each project until they are ready to enter into a lease for the seabed site.
The option payments, totalling some GBP 979 million per year, reduce as a project moves into a lease, or leases, and cease when a lease(s) for the maximum capacity/whole site is granted, at which point developers will move to paying rent.
It looks to me that developers will pay nearly a billion pounds per year for at least a minimum of three years and not more than ten years.
Once a project moves into a lease, rent will be paid.
It seems to be a very profitable occupation to own loads of empty sea!
The Anonymous Widower 
Personally this is plain daft these costs just come back on our electricity bills and then the government has to hand out subsidies.
Comment by Nicholas Lewis | January 20, 2023 |