GBUK Crown Estate Offshore Wind Leasing Round 2
Also known as: UK Crown Estate Round 2, The Crown Estate Round 2, Offshore Wind Leasing Round 2, Second Round of Offshore Wind Leasing, UK Offshore Wind Round 2
Read the full analysis →(41 min read)
Round 2 opened after DTI's November 2002 Future Offshore consultation and the February 2003 Energy White Paper had reframed UK offshore wind from Round 1's non-competitive demonstration-style application process into a competitive, SEA-conditioned leasing regime focused on three Strategic Areas. Developers entered the round with the Renewables Obligation already in force, so the commercial backdrop was an active market-wide ROC regime rather than a downstream project-specific auction. The April 2003 SEA Environmental Report and its consultation translated those policy aims into concrete design constraints, notably the 8-13 km coastal exclusion zone and other area exclusions that shaped the geography of bidding.
15
Unknown format
Agreement for Lease (AfL) + Operational seabed lease
7.4 GW
—
—
—
—
—
—
—
R2 did not impose a single round-wide delivery deadline. Enforcement was through project-specific AfL and lease timetables, with break points and possible loss or reduction of exclusivity for insufficient progress.
Exclusive development rights over the winning developer-drawn bid polygon within a DTI/Crown Estate Strategic Area, during the investigation period before exercise into an operational lease.
Operational lease following exercise of the AfL, granting long-term seabed occupation rights for the offshore wind project.
→ Failure to meet the agreed programme could lead to reduction of the exclusive area, withdrawal of the option, or surrender/termination of the lease rights.
→ Designed to preserve the value of developer-funded surveys and prevent free-riding by later applicants; adoption in the final signed R2 AfL template is not fully confirmed in the current corpus.
Late delivery: R2 did not impose a single round-wide delivery deadline. Enforcement was through project-specific AfL and lease timetables, with break points and possible loss or reduction of exclusivity for insufficient progress.
Operational rent payable to The Crown Estate at 2.0% of gross revenue. Future Offshore §4.4.3 states that all new leases granted until 2010 would continue on this basis, with a full rent review to market level after 20 years and thereafter at 5-year intervals.
GBP 2 percent of gross revenue
Trigger: Operational lease commencement / project revenue generation
Anchor: until event
Bond or substantial financial deposit required as financial surety, replacing Round 1's asset-test approach. Specific amount thresholds are a coverage gap because the Round 2 Information Memorandum is not in the current corpus.
Trigger: Required as part of bid qualification / award security
Decommissioning financial surety required before lease expiry / determination, alongside decommissioning plans. Exact formula and amount are coverage gaps in the current corpus.
Trigger: Posted when required under lease / decommissioning obligations
Single-round competitive written-bid tender within three pre-designated Strategic Areas. Bidders proposed developer-drawn sub-polygons within those larger regions, and The Crown Estate evaluated written submissions in a merit-based competitive process rather than a price-only auction.
Bidder had to provide the required bond or substantial financial deposit, replacing Round 1's asset-test approach.
Bidder had to provide decommissioning plans and the required financial surety for decommissioning obligations.
Bid polygon had to lie within a Strategic Area, or satisfy the slight-beyond-boundary exception, and respect the 8-13 km coastal exclusion zone and related area exclusions.
Bidder had to demonstrate the technical capability to pursue the required development consent and project delivery path.
No revenue-support instrument. Revenue comes from downstream offtake contracts, merchant markets, or bilateral PPAs.
Legal basis: Crown Estate Act 1961; post-award REZ extension via Energy Act 2004.
Legal basis: Future Offshore strategic framework (November 2002); DTI-sponsored Strategic Environmental Assessment under Directive 2001/42/EC.
Legal basis: Contracted by DTI to prepare the SEA Environmental Report (final report dated 29 April 2003).
Legal basis: Section 36, Electricity Act 1989.
Legal basis: Planning Act 2008 NSIP / DCO regime.
Legal basis: Food and Environment Protection Act 1985 and Coast Protection Act 1949.
Legal basis: Marine and Coastal Access Act 2009.
| Winner | Site/Lot | Category | Awarded MW | Price | Total Value | Delivery | Term | Mechanism | Signed | Offer |
|---|---|---|---|---|---|---|---|---|---|---|
| DONG Energy (now Ørsted) | Walney (1 & 2) | Liverpool Bay / North West | 450 MW | — | — | — | — | auction clearing | — | — |
| ScottishPower Renewables + DONG Energy (50/50) | West of Duddon Sands | Liverpool Bay / North West | 500 MW | — | — | — | — | auction clearing | — | — |
| npower renewables (RWE) | Gwynt y Môr | Liverpool Bay / North West | 750 MW | — | — | — | — | auction clearing | — | — |
| Centrica | Lincs | Greater Wash | 250 MW | — | — | — | — | auction clearing | — | — |
| Centrica | Lynn & Inner Dowsing | Greater Wash | 195 MW | — | — | — | — | auction clearing | — | — |
| Scira Offshore Energy (Statoil + Statkraft, 50/50) | Sheringham Shoal | Greater Wash | 315 MW | — | — | — | — | auction clearing | — | — |
| Scira (later Statoil + Statkraft + Masdar) | Dudgeon | Greater Wash | 400 MW | — | — | — | — | auction clearing | — | — |
| Centrica (later Ørsted) | Race Bank | Greater Wash | 580 MW | — | — | — | — | auction clearing | — | — |
| Centrica | Docking Shoal | Greater Wash | 540 MW | — | — | — | — | auction clearing | — | — |
| npower renewables (RWE) | Triton Knoll | Greater Wash | 900 MW | — | — | — | — | auction clearing | — | — |
| E.ON UK | Humber Gateway | Greater Wash | 300 MW | — | — | — | — | auction clearing | — | — |
| DONG Energy | Westermost Rough | Greater Wash | 240 MW | — | — | — | — | auction clearing | — | — |
| E.ON + DONG Energy + CORE (Shell) | London Array | Thames Estuary | 1,000 MW | — | — | — | — | auction clearing | — | — |
| Airtricity + Fluor (later SSE + RWE 50/50) | Greater Gabbard | Thames Estuary | 500 MW | — | — | — | — | auction clearing | — | — |
| Warwick Energy (later Vattenfall) | Thanet | Thames Estuary | 300 MW | — | — | — | — | auction clearing | — | — |
| DONG Energy | Gunfleet Sands | Thames Estuary | 170 MW | — | — | — | — | auction clearing | — | — |