Crown Estate Scotland has opened a new leasing process for smaller-scale offshore wind projects, as well as larger ones for the electrification of oil and gas platforms.
The new Innovation and Targeted Oil and Gas (INTOG) leasing round is aimed at promoting further development of offshore wind while also decarbonising the UK’s oil and gas sector. It comes after Crown Estate Scotland, the public corporation that manages land and property owned by the monarch, held its “historic” ScotWind leasing round earlier this year.
A two-week registration window is now open for developers to log their interest, after which they will be able to submit a full application. Depending on the volume and quality of submissions, it is expected that applicants will be notified of the results by the end of March 2023.
Crown Estate Scotland said awards will be determined on a mixture of bid price and quality of the proposed project, and will be split into two pots – one for smaller-scale innovation projects of up to 100 megawatts of generation capacity, and another for projects of up to four gigawatts linked to oil and gas infrastructure.
The former marks that first time that developers have been able to specifically apply for the rights to build innovation projects in the North Sea using next-generation technologies and systems. There are restrictions on where these can be located, and developers must also map out their supply chain plans.
In the oil and gas decarbonisation category, developers will be required to supply electricity to traditional offshore installations looking to reduce CO2 emissions from their processes. The Crown Estate said this will help meet targets agreed last year between government and industry in the North Sea Transition Deal.
“INTOG represents an exciting opportunity to help decarbonise oil and gas installations and enable innovative projects which are important in lowering costs for the commercial deployment of offshore wind, reducing risk, and developing Scotland as a destination for innovation and expertise,” said Colin Palmer, director of marine for Crown Estate Scotland.
“Platform electrification, which INTOG will help deliver, will reduce North Sea oil and gas emissions while also supporting new skills and jobs. Taken as a whole, INTOG will play a significant role in helping us reach net-zero and meeting our energy requirements of the future.”
Seabed managers said the final leasing documents have been optimised to support early project development and reflect many of the comments and suggestions from potential applicants who were asked for their feedback earlier this year. These include extending option periods from five to seven years, and in the case of electrification projects, a doubling of lease periods from 25 to 50 years.
READ MORE: ScotWind: SNP must not squander 'historic' opportunity
The announcement comes after Crown Estate Scotland held its first ScotWind leasing round for large-scale offshore developments earlier this year. A total of 17 projects were selected from 74 applications. If all are delivered to plan, it is thought Scotland could gain enough additional capacity to power 40 million homes.
The winners included projects off north, east and west Scotland. The areas of seabed which developers can apply for in the current INTOG leasing round are set out in the Scottish Government’s initial plan framework.
First Minister Nicola Sturgeon has previously hailed what the Scottish Government described as the “truly historic” opportunity of ScotWind, which is expected to generate some £700 million in option fees from the successful bidders.
However, INTOG’s goal of electrification of oil and gas platforms could raise questions about “greenwashing”. Despite the UK’s net-zero commitments, the Conservative Party has maintained that the oil and gas sector will be important for decades to come.
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