Greenpeace has accused the British Crown Estate of inflating the cost of offshore wind through its monopoly on the UK’s seabed, the Financial Times has reported, adding the environmentalist group had called on the Crown Estate to either change its lease conditions or face a lawsuit.
The Crown Estate is a corporate entity set up to manage the property of the monarchy and that property includes the seabed off the coast of England and Wales, the FT explained. The company is legally bound not to exploit its monopolistic ownership of such assets, but, according to Greenpeace, that is exactly what it has done with its price-setting practices for offshore wind development.
This has, in turn, driven consumer electricity costs higher and harmed the profits of offshore wind developers, Greenpeace also alleged in a letter that it sent to the Crown Estate in June, the FT said.
“The profits derived from this approach… have been enormous,” the environmentalist group wrote. “However, this has come at the expense of the development of offshore wind power in the UK, which is essential to the UK meeting its net zero ambition and binding international and domestic [carbon] targets.”
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Offshore wind is central to the UK government’s ambition of decarbonizing its power system by 2030. The Starmer cabinet aims to triple the country’s offshore wind capacity from around 15 GW today to between 43 and 50 GW by the end of the decade.
To make investments more appealing, the government extended the length of guaranteed-price contracts with offshore wind developers from 15 years to 20 years in reforms unveiled in July, hoping that longer revenue certainty would allow developers to accept lower guaranteed prices. Since this turned out to not be enough, the government also raised the minimum price it was willing to pay for offshore wind power to entice developers to take part in future tenders.
By Irina Slav for Oilprice.com
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