How the Crown Estate is using Britain’s sea bed for wind power

It was not a great day for the beach: grey and overcast, with a stiff breeze whipping along the shore. But whenever the brave daytrippers building sandcastles at Viking Bay looked up and gazed out to sea, they were presented with a vision of modern British energy.
On the horizon, seven miles out from the east Kent coast, row after row of wind turbines were spinning briskly. All 100 turbines at Thanet Offshore Wind Farm were running at full capacity on Thursday afternoon, generating a combined 300 megawatts of electricity — enough to power 240,000 homes.
When it was completed in 2010, this was the biggest offshore wind farm in the world and the UK was leading the way in a booming industry. Thanet has since been left in the shade; it is no longer even on the list of the largest 50. Last year, Britain was overtaken by China as the biggest generator of offshore wind power, and Germany is snapping at its heels.
But wind power is now back at the top of the agenda.
“Global renewable markets are evolving quickly,” said Dan Labbad, chief executive of the Crown Estate. “Today, the UK is No 2 in the world — we’re a leader in this area — and it’s important that we stay there. But what got us to be a world leader isn’t going to keep us a world leader.”
The Crown Estate has a stake in the issue because it manages the monarchy’s £15.5 billion asset portfolio, although it is independent from the government. Alongside shopping centres, city centre high streets, science parks and prime agricultural land, it holds rights to renewable energy in the seas around England, Wales and Northern Ireland (Scotland’s waters are run by the separate Crown Estate Scotland).
This can be a lucrative enterprise. The Crown Estate’s annual profits nearly trebled to £1.1 billion in the year to March, up from £443 million, on the back of soaring receipts from offshore wind leases. The royal family takes a 12 per cent cut in the form of a sovereign grant and the rest of the profits go to the Treasury.
But now the Crown Estate is going further. It has set itself the target of making available an additional 20 to 30 gigawatts of offshore wind leases by the end of the decade. This is a hugely ambitious goal — the current generating capacity in its waters is 11.8GW — and one that will, if the Crown Estate succeeds, significantly contribute towards Labour’s target of decarbonising the power system by 2030.
“There is no doubt that how we develop these markets and how we support local industrial growth, plus [attract] international investment, is fundamental to being able to continue to generate [energy],” said Labbad, 52.
New legislation was announced in the King’s Speech last month that will allow the Crown Estate to borrow from the Treasury for the first time, freeing up reserves for reinvestment. Labbad expects Crown Estate borrowing to be equivalent to about 10 to 20 per cent of its assets — roughly £1.5 billion to £3 billion.
In another development last month, Sir Keir Starmer announced a partnership between the newly launched, state-owned Great British Energy and the Crown Estate, a deal that he said would “turbocharge our country”.
Officials estimate that the new arrangements could attract £30 billion to £60 billion of private investment in offshore wind. Observers have long advocated better leveraging of the Crown Estate’s assets, even comparing its potential to that of a mini-sovereign wealth fund — and Labbad suggested the comparisons were not far off the mark.
“We create value for the country,” he said. “It’s similar. We are obligated to support the long-term interests of the country and we take those responsibilities very seriously.”
A key part of the new investment powers will be making it easier for developers to come to Britain. On paper, that is an easy sell: our geographical position in the exposed northeast corner of the Atlantic confers the advantage of windy seas, and as an island nation there is access to coasts from all angles, while shallow waters make it relatively easy to install turbines. For many years, Britain was the only serious destination for offshore wind developers.
As a result, there are already 2,765 turbines generating electricity off these shores, with a total capacity of 14.7GW (including Scotland) — enough to power nearly half the UK’s homes. On Thursday afternoon, it was not just Thanet that was at peak capacity; renewables — also including solar power, onshore wind and hydroelectric — were producing 65 per cent of Britain’s needs.
But 12 months ago came a wake-up call. In September 2023, the fifth licensing round for new offshore wind farms (a process run by the government, rather than the Crown Estate) failed to attract a single offer from offshore developers. They complained that the terms on offer were too stringent, the rewards too meagre. Tempted by generous incentives from other nations, they had started to look elsewhere.
Labbad admitted that competition is heating up: “There’s north of 60GW in global auctions going in the 18-month window that we’re in at the moment. That’s unprecedented.”
A key part of his new offer at the Crown Estate is smoothing the process for developers. “We don’t want to build a market where we expect the private sector to take risks that they have no control of,” Labbad said. The organisation has made huge strides in sea bed mapping to identify the best spots for wind farms. It has carried out geophysical surveys to a depth of 50 metres below the sea bed, profiled wind speeds up to 300 metres above the water’s surface, and carried out detailed wildlife surveys to assess the risk of environmental disturbance.
Developers now have access to a database in which the entire 265,000 square kilometres of Crown Estate waters are divided up into 1km sq blocks. For each block, a developer is told how much money they could make by installing a wind turbine in that spot, and how much it would cost to build and maintain it.
At Thanet, water depths of about 20 metres and the proximity of the shore make the cost of producing energy relatively cheap. But these prime spots are becoming harder to find. The Seagreen Offshore Wind Farm in Scotland, which was completed last October, is in water a record 58 metres deep; Dogger Bank, off the Yorkshire coast, is being built 90 miles out to sea.
Other industries have joined the fray, with oil and gas wells, shipping lanes, fishing zones, fuel pipelines and power cables all competing for a patch of the UK’s seas. And they are about to get busier. New technologies, such as carbon capture and storage and green hydrogen, are due to join the mix. As part of the next licensing round, bids are being accepted for floating wind in the Celtic Sea, off the south coast of Ireland, where waters are too deep for fixed turbines, with 4.5GW of projects expected to be approved.
“We’re talking about a different level of spatial need, a different level of environmental interface and a different level of co-ordination with a whole host of other activities,” Labbad said.
To complicate the picture, a growing awareness of the fragility of the wildlife in UK seas means it is no longer acceptable to plonk a wind turbine just anywhere. There are now 178 marine protected areas in UK waters.
The Crown Estate aims to use its new investment powers to ease the way for developers to navigate these hurdles — a plan that they welcome. A spokesman for Vattenfall, the Swedish energy company that runs Thanet, said: “Taking steps to support developers will help accelerate the pace of offshore wind deployment and meet the government’s offshore wind ambitions.”
Danielle Lane, director of offshore development in the UK and Ireland for RWE, the German energy provider, said: “Early-stage survey works could speed up planning, so long as it is done in a way that is useful for developers.”
Dan McGrail, chief executive of the trade association RenewableUK, said: “We welcome any measures from the Crown Estate that will cut the time it takes to build new projects.”
Labbad stressed that the Crown Estate cannot do everything itself. “Parts of the fiscal challenge are beyond our scope. We need others, and that is why we welcome the announcement on GB Energy and their part in bringing new capital to the table.”
The two organisations will “directly co-invest in clean energy infrastructure themselves — for example, floating offshore wind and carbon capture projects,” a government source said.
Labbad added: “We should not be doing things the private sector can do. But if there’s a new technology, we might help support that. If we can de-risk new technologies — such as floating wind — to help it get away, we will look at that.”