Welsh wind developer withdraws from the Crown Estate leasing round in the Celtic Sea

Hiraeth Energy, a Welsh renewable energy developer established to maximise the benefits to Wales of large-scale renewable energy development, has announced that it will not be able to participate in the Celtic Sea offshore wind leasing round due to structural impediments introduced by the Crown Estate’s leasing process.

Established three years ago with the aim of creating a Welsh Wealth Fund to maximise the benefits of renewable energy development for some of the poorest communities in Wales, Hiraeth Energy has consistently advocated increased local supply chain content and Welsh ownership for projects developed in the Celtic Sea.

Hiraeth Energy’s ethos and aims were highlighted in a video released in March 2023, which described the huge potential benefits for Wales if projects were able to incorporate a significant element of local ownership

Hiraeth Energy partnered with Norwegian offshore wind developer Magnora Offshore Wind, which had previously successfully secured seabed rights for a similar project in Scottish waters.

The Crown Estate, which manages the seabed around England and Wales, is about to launch a leasing process that will enable the development of three large-scale (1.5GW) offshore wind projects in the Celtic Sea. Renewable energy development on this scale is a much-needed part of the effort to tackle climate change, and there was early optimism that the leasing round would also prioritise social value. 

However, the design of Round 5 has reverted to previous leasing rounds, which focused on maximising value for The Crown Estate and the Exchequer – using an uncapped, price-based auction that resulted in successful bidders committing hundreds of millions of pounds of upfront costs to secure seabed rights.

Ultimately, this process excludes local developers from leasing opportunities and, more importantly, limits the benefits to the regions and communities that actually host the projects.

Commenting on the announcement,  Project Manager Joseph Kidd said:

“We have changed the nature of the debate around local supply chain and ownership for large renewable energy projects in Wales. Whilst Wales has lost a once-in-a-generation opportunity for significant local ownership of floating offshore wind projects, Hiraeth Energy is continuing to make the case for a wealth fund for Wales based on renewable energy, and we will now be considering other types of renewable energy projects.”

Hiraeth’s approach to offshore wind development and its locally and nationally focused development objectives had attracted significant attention from a wide range of organisations that supported our goals, including of bringing a step-change to ownership of large energy projects within Wales.

The Hiraeth team intend to explore alternative ways in which their expertise and commitment can help Wales, and indeed other communities of locational interest, to achieve the goal of active participation and appropriate co-investment in renewable energy and net zero transition development projects, and look forward to future collaborations with others who share these goals.