The new Labor Government of Prime Minister Keir Starmer put forth an ambitious plan to use a public-private partnership and a newly launched government-owned energy company to accelerate offshore wind development in the UK. In a plan announced on Thursday, the government moved forward with one of the key elements of its election platform to use government resources to build out the clean energy industry.
The government put forth legislation in Parliament to form Great British Energy, which will be a government-owned energy company that will be charged with project development and investments. It will also contribute to local power working with local authorities, support the development of the supply chain, and explore working with Great British Nuclear. The initial investment will be funded by £8.3 billion (nearly $11 billion) from the government.
The second part of the plan calls for a partnership with the Crown Estate, an independent entity that manages the lands owned by the royal family as well as the seabed surrounding the UK. The Crown Estate already administers all the offshore leases, highlighting in its annual report released yesterday that 36 wind farms are operating across its marine holdings with a combined capacity of 11.8 GW, or enough power for 11 million homes.
The UK is targeting 50 GW of offshore wind energy by the end of the decade with the Crown Estate reporting it is planning space for 20 to 30 GW off the coasts of England and Wales by 2030. In the past year, it has launched offshore leasing round five and accelerated round four.
Offshore wind leasing was a key contributor to the Crown Estate’s net profit which was announced yesterday at $1.4 billion up nearly 150 percent from the prior year. Historically a quarter of the profit goes to the royal family, but in 2023 it was cut in half to 12 percent. It still will provide the royal family with nearly $60 million in the next year to pay for its official duties and households. The remainder of the profit goes to the government.
Officials of the Crown Estate said the new partnership with Great Britain Energy will drive greater investment into offshore energy and other green energy projects. As part of the proposal, the government is also changing the investment rules for the Crown Estate so that the new partnership can take a small stake in projects. This is designed to lessen the risk for private investment.
Another of the objectives is to accelerate the leasing and permitting process in the UK’s offshore wind sector. Reports highlight that it currently can take a decade to develop projects and begin production.
The new government has already announced that it would end a ban on further onshore wind projects and unblock the production of cheap solar energy. They predict the new partnership with the Crown Estate has the potential to leverage up to £60 ($US 77) billion of private investment into the energy sector.
The Crown Estate has a £16 ($20) billion portfolio of land and seabed. The new partnership is designed to support a further 20 to 30 GW of offshore wind energy development. The plan calls for this capacity to reach seabed leases by 2030.
