The Crown Estate Offshore Wind Leasing Round 1

2001Round 1Pure priceNo revenue mechanism9 winners962 MW20 bid → 18 won

Also known as: UK Crown Estate Round 1, Crown Estate Round 1, Offshore Wind Leasing Round 1, UK Offshore Wind Round 1

Framework SnapshotAwarded 1 Apr 2001

When Round 1 formally opened in December 2000, UK offshore wind was still at proof-of-concept scale: Blyth's 4 MW demonstration project had just commissioned and no explicit offshore-wind GW target was yet in force. The main policy signal was the Utilities Act 2000 and the broader UK objective of sourcing 10% of electricity from renewables by 2010, with the Renewables Obligation legislated but not yet effective. Because R1 awarded only seabed rights, project economics depended on that forthcoming market-wide ROC regime and, for some projects, the separate DTI Offshore Wind Capital Grants Scheme rather than any auction-awarded revenue contract.

Competition

Bidders (preQ → bid → won)

20 → 18

Format

Unknown format

Prize / Award

Award

agreement for lease + operational lease

Capacity

962 MW

Target delivery

—

Project stage at bidding

pre survey

Commercial terms

Price

—

Payment duration

20 years

Indexation

None

Risk allocation

Site investigation

developer

Offshore transmission

developer

Negative prices

—

Wake-loss support

—

Curtailment policy

—

Non-delivery penalties

—

1Prize Composition

Award Components

agreement for lease— AfL duration is not explicit in surviving primary sources.

Exclusive Agreement for Lease over a developer-nominated seabed area of up to 10 km², allowing exploration, surveys, layout refinement, grid design, and Section 36 / marine-consent applications before conversion to the operational lease.

operational lease(20y)— 20-year operational term; contemporaneous retrospective sources also describe a 22-year overall structure when the AfL period is included separately.

Operational seabed lease converting from the AfL on option exercise, conferring exclusive operational site rights for the wind farm.

Site Investigation: developer

State pre-investigated site: No

Transmission Build: developer

Delivery Obligations

Prize Consideration (winner → state)

percentage of revenue

Uniform Crown Estate rent equal to 2.0% of gross revenue under the operational lease.

2 percent of gross revenue

Trigger: From the operational lease / project operation period

Duration: 20 years

Anchor: fixed year count

Indexation: none — Rent is defined as a percentage of gross revenue rather than a separate fixed fee indexed to CPI/RPI.

The Crown Estate (100%) — Seabed lease rent under the Crown Estate's leasing arrangement.

2Competition Mechanism

Bid Format

Non-competitive first-come-first-served application process against published guidelines. Developers nominated their own sites, subject to site-size and turbine-count caps, and there was no bid price, ranking, or clearing mechanism.

3Qualifying Gates

site area max km2quantitative maximum≥10 km2

Applicant's nominated site had to be no larger than 10 km².

turbines max countquantitative maximum≥30 turbines

Applicant's nominated site could include no more than 30 turbines.

company asset testbinary predicate

Corporate solvency / financial-standing test used by The Crown Estate in place of later-round bonds or substantial deposits.

4Scoring Dimensions

6Revenue Mechanism

No revenue-support instrument. Revenue comes from downstream offtake contracts, merchant markets, or bilateral PPAs.

7Authorities & Jurisdiction

The Crown Estatedelivery bodyawarding bodyseabed lessornational

Legal basis: Crown Estate Act 1961 and Continental Shelf Act 1964 seabed-rights basis within territorial waters.

British Wind Energy Association (BWEA)national

Legal basis: Co-author of the 1999 BWEA / Crown Estate offshore wind guidelines; not a statutory decision-maker.

Department of Trade and Industry (DTI)policy ownernational

Legal basis: Contemporaneous sponsoring department for offshore wind policy and the department named in primary retrospective sources.

Secretary of State at DTIsite planning authoritynational

Legal basis: Section 36 Electricity Act 1989 consent authority for projects in English and Welsh waters.

Scottish Ministerssite planning authorityregional

Legal basis: Section 36 consent authority for Scottish territorial waters.

Secretary of State at DEFRAenvironmental regulatornational

Legal basis: Food and Environment Protection Act 1985 and Coast Protection Act 1949 Section 34 marine licensing regime in force for the period.

Maritime and Coastguard Agency (MCA)national

Legal basis: Statutory navigation-safety consultee in the Section 36 / marine-consent process.

8Process & Timeline

Process Stages

1. Guidelines and application framework established — BWEA / Crown Estate guidelines created the Round 1 framework for small developer-nominated offshore wind sites within territorial waters.2. Applications invited — Applications for developer-nominated sites were invited, initially during 2000 and then formalised by The Crown Estate's December 2000 invitation.3. Application conformance review — Applications were checked for conformity with the round rules, including the 10 km² site cap, the 30-turbine cap, and the company asset test.4. Agreements for Lease signed — Compliant applicants were granted Agreements for Lease on uniform commercial terms in April 2001.5. Statutory consents pursued — After AfL award, developers had to obtain Section 36 and parallel marine/environmental consents on a project-by-project basis.6. Operational lease conversion — On option exercise following project development and consenting, the AfL converted into the operational lease.

Timeline Events

1 Jan 1999guidelines publishedyear[British Wind Energy Association (BWEA)]— BWEA / Crown Estate offshore wind guidelines were published, establishing the Round 1 application framework.

1 Apr 2000applications first invitedmonth[The Crown Estate]— Retrospective timelines place the first invitation for Round 1 applications in April 2000.

1 Dec 2000formal invitation publishedmonth[The Crown Estate]— In December 2000 The Crown Estate formally invited developers to apply to explore and develop offshore wind sites.

1 Apr 2001afl signedmonth[The Crown Estate]— Agreements for Lease were signed in April 2001; surviving sources diverge on whether this covered 17, 18, or 20 applications / sites / developers.

1 Jan 2001capital grants scheme launchedyear[Department of Trade and Industry (DTI)]— The separate DTI Offshore Wind Capital Grants Scheme launched during 2001 as a parallel capital-subsidy competition.

1 Apr 2002renewables obligation effectivemonth— The market-wide Renewables Obligation took effect in April 2002, becoming the main revenue-support backdrop for R1 projects.

1 Apr 2002first consent issuedmonth[Secretary of State at DTI]— DTI Future Offshore reports that the first Round 1 consents were issued in April 2002.

1 Nov 2002future offshore publishedmonth[Department of Trade and Industry (DTI)]— DTI published Future Offshore, the main contemporary retrospective on Round 1 and framework document for Round 2.

1 Nov 2003capital grants scheme completedmonth[Department of Trade and Industry (DTI)]— All three rounds of the DTI Offshore Wind Capital Grants Scheme had been completed by November 2003.

1 Dec 2003first commissioningmonth— North Hoyle became the first Round 1 project to commission in December 2003.

1 Jan 2013last commissioningyear— Teesside (Redcar) is identified in retrospective sources as the last Round 1 project to reach operation in 2013.

9Market Context

Programme

UK Crown Estate offshore wind leasing programme

Policy Targets in Force at Open

UK 10% of electricity from renewables by 201010 % of electricity from renewablesby 2010

Regime Events

Jul 2000Utilities Act 2000legislative basis enacted

Dec 2000Blyth Offshore Wind Farm commissionedproject commissioned

Narrative ReferenceWhen Round 1 formally opened in December 2000, UK offshore wind was still at proof-of-concept scale: Blyth's 4 MW demonstration project had just commissioned and no explicit offshore-wind GW target was yet in force. The main policy signal was the Utilities Act 2000 and the broader UK objective of sourcing 10% of electricity from renewables by 2010, with the Renewables Obligation legislated but not yet effective. Because R1 awarded only seabed rights, project economics depended on that forthcoming market-wide ROC regime and, for some projects, the separate DTI Offshore Wind Capital Grants Scheme rather than any auction-awarded revenue contract.

Cross-Axis Structures

Financial Parameter Links

company_asset_test

Axis 3 gate

Relationships & Sources

Followed By2 auctions

Source Documents5 documents

Auction Results (9)

Winner	Site/Lot	Category	Awarded MW	Price	Total Value	Delivery	Term	Mechanism	Signed	Offer
—	North Hoyle	—	60 MW	—	—	—	—	auction clearing	—	—
—	Scroby Sands	—	60 MW	—	—	—	—	auction clearing	—	—
—	Kentish Flats	—	90 MW	—	—	—	—	auction clearing	—	—
—	Barrow	—	90 MW	—	—	—	—	auction clearing	—	—
—	Burbo Bank	—	90 MW	—	—	—	—	auction clearing	—	—
—	Rhyl Flats	—	90 MW	—	—	—	—	auction clearing	—	—
—	Lynn / Inner Dowsing	—	194 MW	—	—	—	—	auction clearing	—	—
—	Gunfleet Sands I	—	108 MW	—	—	—	—	auction clearing	—	—
—	Robin Rigg	—	180 MW	—	—	—	—	auction clearing	—	—