Memorandum submitted by The Crown Estate
SUMMARY
— The Crown Estate is committed to working
with Government, National Grid, developers and all stakeholders
to help ensure that the aspirations of the UK for offshore renewable
energy are met. — There is excellent potential within UK
waters for wind and marine renewable energy deployment with an
industry keen to exploit this potential. — One of the most
significant barriers facing this generation is access to the onshore
transmission network. It is essential that a significant level
of reinforcement is carried out if these natural energy resources
are to be exploited to their full potential.
— The offshore transmission regime should
not be looked at in isolation from the onshore system. The most
cost effective solutions can be found through considering the
best overall solution to optimise the building and operation of
the onshore and offshore network.
— Significant investment in Britain's electricity
network is required if the Government's targets for renewable
generation are to be met.
— The offshore transmission regime must
be allowed to consider the provision for more than one offshore
energy installation at one time. The Crown Estate advocates a
strategic approach to the planning and design of the offshore
grid.
1.0 THE CROWN
ESTATE
The diverse portfolio of The Crown Estate comprises
marine, rural and urban properties across the whole of the United
Kingdom valued in total at over £7 billion (2006-07 figures).
Under the 1961 Crown Estate Act, The Crown Estate is charged with
maintaining and enhancing both the value of the property and the
revenue from it consistent with the requirements of good management.
We are a commercial organisation guided by our core values of
commercialism, integrity and stewardship.
The Crown Estate's entire revenue surplus is paid
directly to HM Treasury for the benefit of all UK taxpayers; in
2006-07 this amounted to £200.1 million.
1.1 THE MARINE
ESTATE
Our Marine Estate comprises virtually the entire
UK seabed out to the 12 nautical mile territorial limit, in addition
to the sovereign rights to explore and make use of the natural
resources of the UK continental shelf, with the exception of oil,
coal and gas. We own approximately 55% of the foreshore and around
half the beds of estuaries and tidal rivers in the United Kingdom.
A wide variety of businesses and organisations conduct economic
and conservation activities across our Marine Estate, with an
estimated total value of some £46 billion providing almost
890,000 jobs. Over 20% of our coastal estate is leased out to
conservation bodies.
The Crown Estate manages its marine assets on a commercial
basis, guided by the principles of sustainable development and
social responsibility. We take a consistent approach to the management
of our activities around the UK, whilst retaining flexibility
to take local factors into account whenever necessary.
The Crown Estate can bring to bear an unparalleled
level of knowledge and expertise on issues relating to management
of the foreshore, the territorial seabed and continental shelf.
This knowledge includes marine resource management (e.g. marine
aggregate extraction, marine renewable energy installations, seabed
infrastructure, aquaculture and new activities such as gas storage
and carbon capture and storage) and its interplay with other marine
activities such as defence, energy, navigation and marine safety.
We have a strong understanding of the needs of a broad range of
sea users, as commercial partners, customers and stakeholders.
2.0 INTRODUCTION
This response to the Committee's call for evidence
is informed by The Crown Estate's extensive experience of managing
activities within the marine environment and, within its core
remit, of balancing economic activity with stewardship of natural
resources for future generations to use and enjoy.
We are aware that the first inquiry by the Energy
and Climate Change Committee into "The Future of Britain's
Electricity Networks" will examine how Britain's networks
will need to adapt in response to future changes in the generation
mix, and the role of the Government and Ofgem in facilitating
this, and the potential for a supergrid. This response does not
specifically address the questions raised but we believe it is
a useful contextual document that will help inform the Committee
on this important issue.
In June 2008, The Crown Estate announced the
third leasing round for offshore wind energy. This is intended
to deliver up to 25 GW of new offshore wind generation by 2020.
In addition during 2008, a leasing application process for offshore
wind in Scottish Territorial Waters was also held with 6.4GW of
exclusivity agreements being granted in January 2009 pending the
outcome the Scottish Government's SEA. Finally, The Crown Estate
are currently holding a tender for marine renewable energy installations
in Pentland Firth. It is anticipated that up to 700MW of marine
renewable energy will be achieved by 2020, but there is the potential
for considerably more to be delivered from the Pentland Firth
and also from other areas around the UK coast.
2.1 ONSHORE GRID
REINFORCEMENT
There is an excellent resource within UK waters
for wind and marine renewable energy deployment with an industry
keen to exploit this potential. However, one of the most significant
barriers facing this generation is access to the onshore transmission
network. It is essential for a significant level of reinforcement
to be carried out if these natural energy resources are to be
exploited to their full potential. In December 2008, The Crown
Estate published a study showing an indicative scenario for deployment
of offshore wind generation under Round 3. This study identified
onshore and offshore network requirements and fed into the excellent
work that was carried out under the auspices of DECC by the Energy
Networks Strategy Group (ENSG). The Crown Estate encourage the
Committee to recommend further work by groups such as ENSG where
the total network requirements can be considered in a coordinated
and strategic manner. This will present opportunities to identify
cost savings which will benefit the consumer.
2.2 ACCESS TO
THE GRID
It is essential that improved access to the
National Grid system is implemented within a reasonably tight
timeframe for offshore wind, wave and tidal developers. Failure
to deliver improved access will inevitably result in developers
taking their technology to other locations, possibly abroad. The
Crown Estate has been instrumental in seeking to improve grid
access for all offshore renewable energies and will, in conjunction
with others, continue to seek early resolution to this problem.
Developing offshore transmission links will allow energy projects,
including those in remote areas, to improve access to the wider
UK and European markets.
2.3 INVESTMENT AND
STRATEGIC PLANNING
Significant investment in Britain's electricity
network is required if the Government's targets for renewable
generation are to be met. In December 2008, The Crown Estate published
a connection study in support of Round 3. This work considered
a scenario for connecting 25GW of offshore wind. The study identified
that approximately £10 billion of network reinforcements
would be needed. Of this, approximately 7% related to onshore
works.
In order that the most efficient and economic solution
for network investment is delivered, it is essential that a strategic
plan is developed and implemented. The Crown Estate commend the
work undertaken by the Electricity Networks Strategy Group (ENSG),
established under the auspices of DECC, in identifying necessary
reinforcements for the onshore transmission network.
The offshore transmission regime should not
be looked at in isolation from the onshore system. The most cost
effective solutions can be found through considering the best
overall solution to optimise the building and operation of the
onshore and offshore network. In doing so, innovation and integration
with the use of High Voltage Direct Current (HVDC) technology
can be accounted for. Additionally, in order for the delivery
of offshore renewables to be made in the required timescales it
is essential that a long term view of network requirements are
taken and that relevant onshore planning and consenting is carried
out expeditiously.
The offshore transmission regime must be allowed
to consider the provision for more than one offshore energy installation
at one time. The Crown Estate advocates a strategic approach to
the planning and design of the offshore grid. This should be reflected
in a coordinated approach to the licensing of potential offshore
transmission assets.
3.0 CLOSURE
We would be very willing to provide the Committee
with further information on any of the points we have raised above.
All of this response may be put into the public domain and there
is no part of it that should be treated as confidential.
March 2009
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