King Charles III has asked that the Royal Family’s share of The Crown Estate’s earnings from the Round 4 offshore wind seabed leasing “be directed for wider public good” , UK media reports.
As reported on 19 January, all six winners of the latest UK seabed auction have now signed Agreements for Lease with The Crown Estate, which will start the billing period for their option fees, totalling almost GBP 900 million per year.
The Crown Estate pours its profits into HM Treasury, with a quarter of those earnings going to the Royal Family, according to the current arrangement between the Buckingham Palace and the UK government.
UK media have shared a statement from Buckingham Palace, saying a letter was sent to the Prime Minister and Chancellor expressing the King’s wish that the offshore wind energy windfall, specifically the share to which the Royal Family is entitled, be redirected for public use “through an appropriate reduction in the proportion of Crown Estate surplus that funds the Sovereign Grant”.
The annual option fees the Round 4 developers will be paying amount to around GBP 879 million and were determined by the developers themselves through an open market process to ensure fair value for seabed rights was captured, according to The Crown Estate.
By signing the Agreements for Lease, which can be in effect for a maximum of ten years, the developers have committed to at least three years of option payments and will pay the annual option fee for each project until they are ready to enter into a lease for the seabed site.
The option payments reduce as a project moves into a lease, or leases, and cease when a lease(s) for the maximum capacity/whole site is granted, at which point developers will move to paying rent.
The six offshore wind farms – RWE’s Dogger Bank South East & West, EnBW and BP’s Morgan and Mona, TotalEnergies and Corio Generation’s Outer Dowsing, and Cobra and Flotation Energy’s Morecambe – could begin operating by the end of the decade and will produce enough electricity to power more than seven million homes.