The start of the race for floating wind in the Celtic Sea

You may have missed it while sipping your coffee this morning, but the Crown Estate has just fired the starting gun for the development of floating wind in the Celtic Sea. Today’s announcement of its leasing strategy and identification of five ‘Areas of Search’ means that floating wind developers will now be able to formally scope projects and enter into a leasing process that should culminate in the award of 4 GW of projects leases in late 2023. Given the amount of interest already shown, and the number of big hitters who have set their sights on the Celtic Sea, we expect the competition to be intense, especially in Area 2.  

Despite the competition, developers will have to work together, with the UK and Welsh governments, The Crown Estate, National Grid and regional stakeholders to ensure that project delivery is a success. That will require significant investment in grid infrastructure, port facilities and regional supply chain capability. 

This leasing process must be matched by a strategic plan for ports and grid infrastructure. Work in these areas is already underway; next week we expect National Grid ESO to publish its first pass of a Holistic Network Design (HND) for offshore and onshore grid infrastructure. We will have to wait, however, until 2023 to see an updated version of the HND which encompasses the new 4 GW of Celtic Sea leases. 

The Crown Estate’s leasing strategy is likely to result in the award of gigawatt-scale projects. The strategy also however includes support for a phased build-out, or ‘stepping stone’ approach, starting with 300 – 400 MW scale projects. This is a critical first step to enable regional ports and supply chains to scale up and ensure that there is an opportunity to drive down costs through learning and innovation. To make this approach work, developers will need to engage with regional partners, and industry, to fully develop their supply chain plans.  

The indication, given by The Crown Estate, that there is scope for up to 20 GW of future floating wind capacity within the Celtic Sea area also sends a very important message, that should go some way to assure investors of the region’s long-term potential. 

Some key takeaways from this morning’s announcement include: 

• Continued intent to deliver 4 GW of floating offshore wind power by 2035, through a leasing round in 2023. 
• A leasing strategy designed at a pace and scale to support sustainable supply chain and infrastructure development, including a continued commitment to support a phased approach to delivering projects in the Celtic Sea. While we support the phased or ‘stepping stone’ approach, it is important that developers of early GW-scale projects are encouraged and supported to carry out this approach. 
• Five ‘Areas of Search’ extending from the South Wales coast, all the way down the North Devon and Cornwall coast and past the Isles of Scilly. Interestingly, most of the publicly announced projects so far are clustered in Area 2, the closest in land Area of Search. This could lead to intense competition as part of the leasing round, but could also provide developers the chance to avoid this by developing in some of the further areas. 
• A vote of confidence in the Celtic Sea by exploring what future leasing rounds may look like post 4 GW. In The Crown Estate’s press release, they note that the Celtic Sea has the economic potential to accommodate up to an additional 20 GW of floating offshore wind capacity by 2045. This is crucial in achieving net zero, providing system benefits by increasing the diversification of offshore wind, and supporting the development of a Celtic Sea regional supply chain. It is unclear whether there is expected to be 20 GW of potential within the current Areas of Search or whether these are likely to be expanded to reach this future capacity. Regen supports the exploration of the seabed off the south coast of Cornwall and Devon and into the English Channel to meet this target. 

Today marks the start of a period of intense activity for developers, and for regional stakeholders, and another key milestone in the long journey to develop offshore wind in the Celtic Sea. 

• Read Regen’s recent paper on the opportunity for floating offshore wind in the Celtic Sea
• For further information about Regen’s offshore wind energy work, contact Grace Millman at gmillman@regen.co.uk