UK wind farm developers start paying $1 billion fees for seabed

Bloomberg

Companies hoping to build wind farms off the coast of the UK have started to pay the more than $1 billion in annual fees for access to sections of empty sea, starting a race to build the projects as quickly as possible and generate clean electricity.
The Crown Estate, which manages the seabed around England and Wales, signed agreements to lease six areas off the country’s coast to developers including BP Plc, TotalEnergies SE and RWE AG. With the contracts signed, the developers are on the hook to pay annual fees for as much as 10 years or until their projects reach certain maturity thresholds.
The agreements come nearly two years after the companies first agreed to pay record-high fees for a chance to develop the renewable power plants at the center of Britain’s strategy to cut greenhouse gas emissions. If built, the wind farms would provide enough electricity to satisfy demand for roughly seven million British homes, and will be key to the UK’s plans to reach net-zero emissions by the middle of the decade.
But the high fees for seabed add another cost, along with higher wind turbine prices and rising interest rates, that could make it harder to finance the next generation of giant wind farms or make their power more expensive for consumers. When agreed in 2021, the fees amounted to nearly £880 million ($1.1 billion) and are
adjusted for inflation annually.
Britain has the world’s largest fleet of offshore wind farms outside China. The country helped pioneer the practice, which places turbines out in the sea, where wind speeds are stronger and more consistent. Development in the middle of the open water also allows developers to use the largest turbines available, which today are the size of skyscrapers.