Offshore Wind Saves Crown Estate’s Day as Pandemic-Hit Revenues Plummet

The Crown Estate has announced a net revenue profit of GBP 269.3 million (around EUR 315 million) for the financial year 2020/21, a 21.9 per cent decrease compared to the previous year, significantly impacted by three national lockdowns and various restrictions as a result of the pandemic.

However, while the profits from the recently held Round 4 offshore wind leasing would not be in Crown Estate’s books until after the ongoing environmental assessment stage (known as Plan-Level HRA) is completed, the UK seabed manager has marked a 11.9 per cent 12-month total return supported by the results of the offshore wind leasing.

Without the impact of Round 4, the 12-month total return would have been -3.2 per cent, 0.3 percentage points below the annual bespoke benchmark of -2.9 per cent.

The value of the Crown Estate’s portfolio has also climbed by 7.5 per cent to GBP 14.4 billion (approximately EUR 16.84 billion), with the recent offshore wind leasing contributing to this increase as well.

In February, the Crown Estate selected six offshore wind projects in the Round 4 leasing, whose developers have committed to the investment of a total of GBP 879 million (around EUR 1 billion) in option fee deposits. 

This was the first time that option fees were part of a bidding process for offshore wind farms in the UK, since the Crown Estate previously had fixed annual option fees.

The projects, for which rights are expected to be awarded in 2022, could deliver a further 8 GW of installed offshore wind capacity in the UK.

The bidders selected for the six Round 4 sites are: RWE, a consortium of BP and EnBW, a joint venture between Total and GIG, and a joint venture between Cobra Instalaciones y Servicios and Flotation Energy.

Together with the ScotWind leasing from Crown Estate Scotland, the Round 4 projects could build on the UK’s existing offshore wind pipeline of 41.4 GW and help take the total to nearly 60 GW.