Battle Royale for Scotland's Giant Offshore Wind Auction

Five oil majors and a slew of smaller companies are battling for the right to build a mega offshore wind project in Scotland after the country announced the first round of seabed acreage licensing in a decade.

Equinor, TotalEnergies, Royal Dutch Shell, RWE and three partnerships - Ocean Winds with Aker, BP with EnBW, and Red Rock Power with Eni - are among the many companies that have submitted bids for ScotWind, a giant lease auction covering more than a dozen sites.

The companies are aiming to win the contract to invest in building Scotland’s next generation of offshore wind farms - an investment estimated to be worth nearly $12 billion. The auction round has the potential to make the country a global leader in offshore wind and accelerate its energy transition.

The scattered collection of North Sea sites cover a total area of nearly 5,000 square miles, and together they have the potential to support wind projects with a capacity of 2.9 GW. This capacity is a strategic asset for Scotland’s ambitions to attain net-zero emissions by 2045 - one of the most ambitious targets globally. To achieve its goals, it will require acceleration of floating offshore wind technology, as many of the sites are in deep water.

The Scottish government has set a target to reach 11 GW of offshore wind capacity in its waters by 2030, indicating a significant ramp up of activity over the coming decade.

“We want to harness the clean power from Scotland’s offshore wind and use our capabilities as an integrated energy company to accelerate the country’s EV charging network, build its hydrogen offering and strengthen its supporting infrastructure, including ports and harbors,” said Dev Sanyal, BP executive vice president for gas and low carbon.

Crown Estate Scotland, a public corporation, is overseeing the leasing process for the 15 seabed areas, including the largest sites off the Aberdeenshire and Angus coast; smaller sites in the Moray Firth; one to the east of Shetland; three to the west of Orkney; one off the west coast of Lewis; and one north-west of Islay.

The ScotWind project has received significant interest from global energy majors due to its potential for growth. Despite being the windiest country in Europe, Scotland continues to lag behind other European nations in developing renewable energy from offshore wind. Currently, onshore wind delivers about 70 percent of energy capacity in Scotland, followed by hydro and offshore wind. Though the total wind installed capacity stood at 9,347 MW as of June 2020, 8,366 MW was onshore and only 981 MW offshore.

“A net zero world needs offshore wind to grow fast and at scale. We are an offshore energy company playing to our strengths, leveraging our execution capabilities and our leading position in floating offshore wind,” said Jens Økland, Equinor’s senior vice president for business development in renewables.

The results of the ScotWind leasing round are expected to be announced early next year.