Loading...

Friday, June 18, 2021

Oil giants devour Britain’s new wind energy projects

Major oil companies are preparing to develop the next generation of wind farms near British shores after British Petroleum and Total won contracts in bidding before many utility companies have dominated the field so far.

The Crown Estate auctioned the rights of the seabed, which would allow for 8 gigawatts of wind farms, enough to power more than 7 million homes. This project is important to Prime Minister Boris Johnson’s goal to quadruple the country’s offshore wind capacity in the next decade, which is the backbone of his plan to reduce carbon emissions.

It is the first time in a decade that Crown Estate is auctioning seabed rights for wind farms. The industry has changed dramatically since that time, construction and financing costs have fallen, while competition for such projects has intensified. But relatively small independent developers were the ones buying the sites a decade ago, while now the major utility companies and the two largest oil companies in Europe are competing for the projects.

The result was a consortium of “British Petroleum” and “NBW Energy Baden-Württemberg” winning 3 gigawatts of energy, and “Total” with the “Green Investment Group” of the “McGuire Group” by 1.5 gigawatts, and the “RW” arm E “for renewable energy at 3 gigawatts. A joint venture between Cobra Instalaciones y Servicios and Floatation Energy, experts in floating wind farms, won the rights to develop a site for 480MW.

Big losses
Obtaining the rights to the seabed is an important first step in building a wind farm, a process that could take years. The consequences will be heavy losses for current players such as Orsted, Equinor, and SSE who previously dominated the UK offshore wind farm field. Crown Estate didn’t say when would you bid for other areas?

RWE was the only large utility company to win the rights to develop projects without a partner in this round.

For the winners, the race is now to get project licenses and build them. Until the wind farms are built and the power generation begins, developers must pay a fixed annual fee. After that, they will pay a percentage of their revenue from selling the energy.

RWE said: The average price at which the company obtained the seabed rent was approximately £ 82,550 ($ 113,415) per megawatt per year, the lowest price awarded during the auction. British Petroleum and NBW agreed to pay 154,000 pounds per megawatt.

The Crown Estate manages the waters surrounding England, Wales, and Northern Ireland. Under its administration, the lands are owned by the British Crown and are administered in the public interest, along with Queen Elizabeth II’s private property. The profits are sent to the treasury, but the Queen’s family gets a share of it.

%d bloggers like this: