Offshore wind power in Scotland powers oil and gas platforms in the North Sea

Offshore wind power in Scotland powers oil and gas platforms in the North Sea

Offshore wind energy in Scotland entered the oil and gas sector for the first time in the world, through a lease round in which reputable international energy companies competed in the sector.

Crown e-State Scotland announced the selection of 13 bids out of 19 submitted bids to lease the seabed for the construction of wind energy projects specializing in the operation of offshore oil and gas platforms, according to Reuters.

The companies winning bids for offshore wind energy projects in Scotland include the British oil company BP and the French company Total Energy, in addition to a number of renewable energy companies in the Kingdom, according to the specialized energy platform.

These projects aim to provide sufficient clean electricity to operate drilling and production platforms in the North Sea, which may contribute to reducing emissions from the oil and gas sector in Scotland and the United Kingdom.

for 50 years

Offshore wind farm. Photo courtesy of Wind Europe

The winning companies will obtain lease contracts for areas of the North Sea bottom for periods ranging from 25 to 50 years, through a special contracting system.

The maximum capacity of the winning projects in the Scottish auction is 5 gigawatts, in addition to 500 megawatts for smaller innovative projects, according to the specialist energy platform.

The winners will make an initial investment in offshore wind projects in Scotland of up to 260 million pounds ($317.2 million), and seabed rental fees will go to the government during the long term contract with the companies.

Cerulean Winds is preparing to pump 138 million pounds sterling, while Floatation Energy will pump about 96 million pounds, and they are the largest winning investors in the Scotland auction.

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(1 pound sterling = $1.22).

BP and Total

British oil company BP is expected to make initial investments of around £1.6m, while Total Energy will allocate only £200,000 initially, according to offshore-energy.

The seabed leases will be signed by E Crown State, an independent trading company that oversees the seabed around Britain.

Britain is competing with the world’s largest country in the offshore wind energy sector, which contributed to producing 25% of the total electricity generated in the United Kingdom in 2022, enough to supply 40% of homes with clean electricity, according to the specialized energy platform.

It is expected that the final lease contracts will be awarded to the winning companies in the Scottish auction during 2024, which will contribute to reviving the Scottish government’s revenues by about £ 262 million from seabed rental fees over the next year, in addition to securing regular periodic returns for a period of 50 years.

revenue to Scotland

The area of ​​​​the seabed that will be awarded to the winning companies is approximately 1,673 square kilometers, through the “Crown E State Scotland” company, which will transfer its net profits to the Scottish government for allocation in the sections of public spending.

Scotland’s unique seabed leasing auction differs from any other leasing auction previously launched in the United Kingdom or the world, as it targets oil and gas platforms and facilities for the first time globally.

The United Kingdom includes 4 territories that belonged to the British Crown in the past, namely: (England, Wales, Scotland, and Southern Ireland), and Scotland enjoys a status of internal independence only on its internal territory, but it does not enjoy freedom of communication with any external government, except after the approval of the British Crown government. in London.

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billion dollar rent

Offshore wind power in Scotland
An offshore wind farm in Britain. Photo courtesy of the Financial Times

Crowne State, which manages the seabed around Britain and Wales, has signed lease agreements for 6 blocks of the British North Sea bed with several companies that will develop a series of offshore wind projects in the North Sea (January 2023).

The list of winning companies in the auction includes the British BP, the French Total Energy, and the German RWE, and these companies are scheduled to pay annual rental fees exceeding one billion dollars for a period of 10 years, according to Bloomberg.

Leasing fees in the United Kingdom are higher than other countries, due to its global leadership in this renewable sector, and its acquisition of 29% of the total number of offshore wind farms in the world, according to 2021 data, followed by China at 28.3%.

The capacity of wind farm projects in the United Kingdom reached nearly 86 gigawatts, including projects in operation and under construction, in 2021, while the capacity of the sector’s projects in China reached 75 gigawatts, according to the specialized energy platform.

40 GW by 2030

The UK has been investing heavily in offshore wind projects for years, as part of plans for energy transition, climate change and carbon neutrality by 2050.

The Kingdom plans to double the production capacity of wind energy projects from 10 gigawatts to 40 gigawatts by 2030, which will enable it to fully cover the electricity consumption of the household sector.

The United Kingdom is located in a geographical area suitable for wind energy projects in terms of wind rates and auxiliary weather factors in the North Sea, which increases the attractiveness of wind farm projects and increases its production capacity in generating clean electricity.

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