RenewableUK has said too few sites were made available to meet demand in the Crown Estate’s Round 4 and said it is concerned the high bids will drive up costs for developers and consumers.
The trade body said the limited supply when demand was high led to high option fees, which will total £879m per year after unprecedented bidding levels.
“The result of this leasing round shows that while demand for new offshore wind projects has never been higher, too few sites were made available to meet this demand,” said deputy chief executive Melanie Onn (pictured).
“Any auction run on that basis will inevitably lead to high fees like these, and our concern is that this could ultimately mean higher costs for developers and consumers.”
She added: “Going forward we need more clarity from the Crown Estate on the timing, size and speed of future leasing rounds. Sustainable competition and prices are vital for consumers, industry and the supply chain.”
Round 4 was the first time a bidding process to set ‘option fees’ has been used in the leasing process for offshore wind farms.
Previously The Crown Estate had set fixed annual option fees.
RUK said the industry had warned that the limited number of sites available and high demand risked an auction that resulted in very high bids.
The nearly 8GW awarded in this 4th Leasing Round is significantly lower than the 32GW secured in the 3rd leasing round held in 2010.
Onn added: “Offshore wind will be the backbone of our future electricity system and growing the pipeline of offshore wind projects is essential to ensure we have the capacity we need. These new sites can make a huge contribution to decarbonising our energy system and achieving net zero.”