Scotland Details Innovation and Targeted Oil and Gas Offshore Wind Leasing Round

Crown Estate Scotland has revealed the proposed details of the process of leasing offshore wind farms in the field of innovation and target oil and gas (INTOG).

Developers will be eligible for small innovative offshore wind projects with a capacity of less than 100 MW, as well as larger oil and gas infrastructure projects to provide electricity and reduce carbon emissions associated with these facilities.

The awards will be determined on the basis of mostly open auctions and will be divided into two banks – one for smaller innovation projects and one for large projects related to oil and gas infrastructure.

The objectives of the innovative leasing element INTOG are to enable projects that support cost reduction in support of the commercial deployment of offshore wind turbines, including alternative outputs such as hydrogen; and the further development of Scotland as a place for innovation and technical development, which will reduce risks and supply chain opportunities.

The goals of the target oil and gas leasing element INTOG are to maximize the role of the sea wind in reducing emissions from oil and gas production; and to achieve the target installed capacity in a way that provides the best opportunities for Scotland and supply chains in line with the principles of transition only.

The proposed evaluation and weighting criteria for innovation projects will be price (30 percent), innovation (40 percent) and delivery (30 percent). For targeted oil and gas projects, the separation will be price (70 percent) and delivery (30 percent).

The auction window is expected to open in June

The areas of the seabed that will be available are set out in the original plan of the Scottish Government, consultations on which ended in October 2021.

Applications should be located within the areas and other planning parameters defined by the Initial Plan Framework to ensure that environmental and stakeholder considerations shape leasing activities. The planning process will result in a new Sectoral Marine Plan (SMP) for sea wind for INTOG, Crown Estate Scotland said.

The Scottish Government does not expect to publish a final plan until the autumn of 2023, so potential INTOG projects will be able to apply for exclusive agreements at Crown Estate Scotland at an early stage. The draft plan will be based on projects that have received exclusive contracts. Only projects included in the final plan will be awarded to option agreements.

Applicants will also be required to submit a Supply Chain Development Statement outlining the nature and location of any supply chain activities related to their proposed project.

Bids will be evaluated by a combination of price and quality, currently a bidding window scheduled to open in June 2022said Crown Estate Scotland.

“Following our initial announcement last year, we are now working with the industry on how the next phase of the INTOG leasing process will work and what it can achieve.” Colin Palmersaid the Marine director for Crown Estate Scotland.

“This lease is to create opportunities for better deployment of marine wind technology in Scottish waters. While we recognize that industry and government need to take the key steps needed to move to oil and gas, we believe this will be a step towards advancing this transition to pure zero. ”

INTOG leasing structure

The INTOG Leasing Round will have three key stages: Exclusivity, option agreements, and Rent.

Potential developers will be invited to apply for exclusivity, which is a preliminary agreement between Crown Estate Scotland and the applicant, to later enter into an option agreement taking into account maritime planning considerations and any other relevant factors.

Projects identified in the final INTOG SMP may receive an optional agreement setting out the terms on which Crown Estate Scotland will lease if the developer manages to obtain all necessary approvals.

Finally, projects that receive all necessary approvals and serve as a valid notice of selection during the option period will be leased and construction can begin.

Source: Crown Estate Scotland

Crown Estate Scotland has invited to add feedback on the proposed lease terms, which may be granted until March 21.

“The INTOG process will also open the door for smaller, innovative offshore renewable projects to demonstrate its technology, such as green hydrogen, in Scottish waters and offer clean energy potential from marine winds to support North Sea decarbonisation, building on the vast potential of electricity generation potential. as part of the ScotWind sea wind leasing, ” Michael Matheson MSPsaid Net Zero and Sotland’s energy minister.

“As a recent ScotWind announcement showed, Scotland is at the forefront of marine wind development in the world. As in the ScotWind leasing round, when we move on to the application phase, each applicant will be required to submit a Supply Chain Development Statement (SCDS), which includes commitments that set the estimated level and location of costs at the various stages of their project. We expect that engagement from the outset will help meet supply chain commitments, and although they can be updated during the development phase, developers will ultimately meet commitments. ”

This process is separate from the ScotWind Leasing round for commercial-scale offshore wind projects in Scottish waters.

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