Crown Estate to profit £5 billion from wind farms

Crown Estate is expected to earn £5 billion over the following 25 years from new offshore projects in the UK. The massive boost in revenue comes after Crown Estate representatives stunned energy chiefs by tripling the costs for them to be allowed to install and operate the turbines off the UK coast.

The Crown Estate, which owns up to 12 nautical miles of seabed off the coast, has the exclusive right to grant authorization to construct any wind turbine in UK waters. Top energy consortiums have been in dialogue on winning permits for the largest and third round of offshore wind farms. At stake are nine large offshore projects with a total area size equal to Wales.

The results of the bid will be submitted to Climate Change Minister Ed Miliband within the week, while the energy groups will be notified of the outcome next week. The winners are anticipated to include the UK’s Centrica and Scottish Power, Swedish-owned Vattenfall, and Germany-based RWE and Eon.

During the initial round of discussions, Crown Estate accepted the payment arrangement of £1 per megawatt hour of electricity produced by wind turbines, but during the recent negotiations, it had trebled the cost. The price increase will likely benefit Crown Estate over £250 million annually once the turbines are installed and running.

Currently, Crown Estate has a £6 billion property portfolio and earned a profit of £226.5 million last year. Founded in 1066, Crown Estate will give all its proceeds to the UK Treasury – an arrangement introduced by King George III in 1760.