Queen's payday as Crown Estate bags £9 billion in wind farm auction

The Crown Estate, which manages the Queen’s property and land, said it had auctioned off eight gigawatts of potential new offshore wind capacity to help the UK meet its demand for renewable electricity.

The deals are set to bag the Crown Estate around £879 million every year for the next decade, with a share going to Buckingham Palace.

The Sovereign Grant, which funds the Queen and the monarchy’s official duties, is set at the beginning of each financial year and is currently equal to 25 per cent of the Crown Estate’s profits – allocated two years in arrears.

The Grant, which is reviewed every five years, is usually equal to 15 per cent of the Crown Estate's profit - but a 10-year increase was introduced to fund a major refurbishment of Buckingham Palace.

It is due to return to its original 15 per cent of the Crown Estate’s profits in 2027.

The system used to run the offshore wind capacity auction came under fire from RenewableUK, a trade body, for pushing up prices for businesses to deliver much-needed renewables into the UK’s grid.

In the last so-called leasing round, a decade ago, 32 gigawatts of potential wind farms were assigned, the association said, and last time there were no “option fees” imposed on bidders.

Successful bidders for the offshore sites paid an option fee deposit to the Crown Estate, before entering into a plan level HRA process, a legal requirement to assess potential implications on protected species.

When this process concludes, developers will pay an annual equivalent of their deposit until they enter into a lease.

Offshore Wind Limited, the firm spearheading the wind farm set to be built off the coast of Blackpool, paid a £44,751,840 deposit to the Estate.

“The result of this leasing round shows that, while demand for new offshore wind projects has never been higher, too few sites were made available to meet this demand,” said Melanie Onn, RenewableUK’s deputy chief executive.

“Any auction run on that basis will inevitably lead to high fees like these, and our concern is that this could ultimately mean higher costs for developers and consumers.”

The Crown Estate owns the seabed off the coast of the UK, so is a vital part of freeing up land for offshore wind projects.

It said the latest round could help save the UK around 12.5 million tonnes of carbon dioxide emissions every year, or around one fifth of annual household emissions.

It also helps the Government to get closer to its target of having 40 gigawatts of wind power in British waters by 2030.