The Crown Estate posted record net revenue profit of more than £1bn in 2023-24, partly driven by the option fees being paid by developers through Offshore Wind Leasing Round 4.
The £1.1bn haul was £658.1m higher than the previous financial year, according to the seabed landlord for England and Wales, demonstrating “portfolio resilience” and the “short-term uplift from offshore wind leasing”.
Option fee income is expected to continue at a similar level in the current financial year before dropping to more normal levels when customers begin the development phase of their projects, the Crown Estate said.
Option fees for successive leasing rounds, whilst set at auction, are also expected to be lower.
A £15.5bn valuation of the Crown Estate’s portfolio (down from £16.8bn in 2022-23) shows the figure beginning to normalise as option fees are drawn down for distribution to the nation’s finances together with an improved timeline for projects being delivered.
A further reduction is expected in 2024/25 as next year’s income is realised, although The Crown Estate expects to see greater value in the seabed over the medium to long term.
There are now 36 wind farms operating across its marine holdings with a combined capacity of 11.8GW, enough renewable electricity to power approximately 11 million homes.
An important moment from the year was the launch of Offshore Wind Leasing Round 5, which is set to generate up to a further 4.5GW by putting innovative floating wind farms in the Celtic Sea, bringing a wide range of supply chain opportunities for UK companies.
To support the UK’s ambition to deliver 50GW of offshore wind by the end of the decade, subject to legislation, the Crown Estate is now planning to deliver seabed space to generate a further 20–30GW of renewable offshore wind off the coast of England and Wales by 2030.
The year also saw progress in other marine renewable energies, including a £1.4m investment in the Morlais tidal energy demonstration project, and the signing of an Agreement for Lease for the ‘Endurance’ project which could lead the way for one of the world’s largest carbon capture and storage projects below the North Sea.
Dan Labbad, chief executive at the Crown Estate, said: “Today’s record results are the product of years of commitment and investment into helping create the UK’s world-leading offshore wind sector, as well as the active management of our diverse and resilient portfolio.
“Our track record and remit are also enabling us to invest and lay the foundations for future value creation that will benefit the country and its finances.
“In support of this, we have welcomed the Government’s commitment to bring forward legislation that will broaden our investment powers and enable us to have an even greater impact in the long-term national interest, from supporting the UK’s decarbonised, energy secure future to nature recovery, regeneration and economic growth.”