July 19 (Renewables Now) - The Crown Estate on Thursday presented details of Offshore Wind Leasing Round 4, which later this year will award new seabed rights in the waters around England, Wales and Northern Ireland.
At least 7 GW will be made available to the market, as has been disclosed previously.
After 18 months of engagement with the market and stakeholders, the Crown Estate has finalised the tender design. It will have three stages -- Pre-qualification, Invitation to Tender Stage 1 (ITT 1), and Invitation to Tender Stage 2 (ITT 2). In the first stage, the technical competence of the bidders will be assessed. Then ITT 1 will evaluate the project bids and their compliance with tender project-specific financial and technical criteria. Finally, in ITT 2 the option fees offered by bidders will serve as the final determinant of project award.
The Crown Estate’s Business Development Manager, Jonny Boston, said that assessing the technical capability of potential bidders and their projects before putting the spotlight on the option fee would ensure that “capable bidders and the strongest possible projects come forward for new leasing, within a process that is objective, fair and transparent.”
The tender design introduces a multi-cycle bidding process to award projects in sequence through daily bidding cycles. This will boost transparency as developers will know what the price, location and capacity of awarded projects are at each stage of the bidding so they can make adjustments to their strategy.
Another new element is the annual payment approach for the option fees, which will reduce the upfront capital requirement on developers and thus make Leasing Round 4 accessible to a broader pool of potential offshore wind developers.
Consortia will be allowed to bid in this round, but an organisation will be able to participate in only one bidding entity.
The Crown Estate has confirmed the Bidding Area caps which are in place to ensure geographic diversity of Round 4 offshore wind projects. Projects will be awarded in at least three separate Bidding Areas, with no more than 3.5 GW of capacity in any one of these.
At the point of launch of Round 4, the areas of seabed being made available to the market will also be confirmed.