The Scottish government will earn more than £260m after agreeing to lease areas of its seabed to floating offshore wind projects that can power oil and gas rigs.
In a world first, Crown Estate Scotland gave the green light for companies to help trim the North Sea’s carbon emissions by developing floating windfarms that can directly supply oil and gas platforms with renewable electricity.
Eight companies, which include the UK-listed oil firm Harbour Energy and an investment unit of the oil company BP, will pay a total of almost £262m in “applicant fees” once the agreements are finalised next year for the chance to build 13 offshore wind projects totalling 5.5GW.
The leases were awarded to eight full-scale windfarm projects that plan to supply electricity directly to oil and gas platforms, as well as five small-scale wind power projects that will provide test beds for innovative new technologies that are not yet ready to be rolled out at scale.
The crown estate expects to rake in further revenues for the Scottish government from “rent payments” once the windfarms begin operating for lifetimes, which could stretch to between 25 and 50 years.
The North Sea oil industry is under pressure to cut its carbon emissions as the UK government continues to defy the anger of environmentalists by approving new oil and gas projects despite its legally binding climate targets.
The Climate Change Committee (CCC), which advises the government on climate issues, has said that the UK carbon budgets can still be met if new UK fields are developed, provided that additional actions are taken to reduce emissions, such as electrifying offshore platforms with renewable energy.
“However, there is also a wider question: whether developing new UK fields would help or hinder efforts to reduce emissions globally,” said the CCC’s chief executive, Chris Stark, in a letter to the government last year.
Oil companies are turning to floating offshore wind technology to replace the gas and diesel generators that usually power their rigs because these turbines can generate electricity even in very deep areas of the UK Continental Shelf where traditional windfarms could not be built.
Colin Palmer, a director at Crown Estate Scotland, said the leasing round would help to reduce North Sea carbon emissions, generate revenues for the Scottish government and encourage innovation in the offshore renewables market.
Brian McFarlane, an industry co-chair of the Scottish Offshore Wind Energy Council, added that by using “Scottish deep-sea expertise built up over many years” would give the industry the opportunity “to show the world how to successfully build and operate floating offshore wind sites”.
