Crown Estate Scotland opens flagship leasing round for offshore wind innovations

Energy generated by some of the successful projects will serve the oil and gas sector

Crown Estate Scotland’s Innovation as Targeted Oil and Gas leasing process opened today (10 August) for registration. After two weeks, registered developers will then be able to submit a full application.

For the first time, developers will be able to specifically apply for the rights to build smaller-scale innovation projects in the North Sea using next-generation technologies and systems. Projects should not exceed 100MW of potential generation capacity and there are restrictions on where they can be located. Developers should also have solid plans for their projects’ supply chains.

The Scottish Government has stated that projects up to a total of 500MW of generation capacity will be considered in this leasing round. Final results are expected by the end of March 2023.

Crown Estate Scotland is also opening another leasing round for offshore wind projects and other projects intended specifically for use by the oil and gas sector, to reduce emissions from their processes.

In this ‘Targeted Oil and Gas Decarbonisation Projects’ category, the planning process will assess projects up to a total of 4GW of generation capacity. They will be required to supply electricity to oil and gas assets. Excess generation can be used for other purposes, but this will need to be an add-on.

In both categories, developers will have an option period of seven years. In the ‘Targeted Oil and Gas Decarbonisation Projects’ category, lease periods will be 50 years – up from 25, following consultations with developers.

Crown Estate Scotland’s director of marine energy Colin Palmer said the leasing process “represents an exciting opportunity to help decarbonise oil and gas installations and enable innovative projects which are important in lowering costs for the commercial deployment of offshore wind, reducing risk, and developing Scotland as a destination for innovation and technical expertise”.

The announcement comes after Crown Estate Scotland held its first ScotWind leasing round for large-scale offshore wind earlier this year. That approved applications for projects totalling almost 25GW of capacity.

Questions will doubtless be raised about whether the electrification of oil and gas platforms is greenwashing. Oil and gas companies will see most of their life-cycle emissions falling in the Scope 3 (indirect) category, largely from end-use of their fuels, rather than from Scopes 1 and 2 (direct and power-related).

The Conservative Party has maintained that the oil and gas sector will be important for decades to come despite the nation’s net-zero commitment. The Energy Security Strategy confirmed plans for a new licencing round for oil and gas for Autumn 2022 and paved the way for a potential end to the ban on fracking.

These moves seem to contradict the advice of the Government’s own Climate Change Committee and of other important bodies like the International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC).

However, the Strategy did increase ambitions on offshore wind. The UK will now aim to host 50GW by 2030. Up to 5GW of this will come in the form of floating offshore wind arrays.

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