The Crown Estate will shortly issue information about its 4GW Celtic Sea lease auction on the requirements for developers to qualify for the bidding phase of the auction, which will be determined by price.
The Crown Estate will pass or fail prospective bidders based on their Supply Chain Investment Plans (SCIPs) and Social and Environmental Value Creation Plans (SEVCPs). It is likely these documents will be based on the Government’s ‘Social Value Model’. This sets out five key areas where projects should create additional value. It also sets out the government’s approach to evaluating the social value that projects’ create.
This plan is like the ‘Supply Chain Development Plan’ (SCDP) mechanism used at the ScotWind lease round last year. The development of SCDPs was a significant and worthwhile undertaking for developers, and we were delighted to provide our support to a successful Scotwind project.
For The Celtic Sea, the requirement for both an SCIP and SEVCP means that developers will need to put forward expansive plans at a very early stage of project development. Projects may, for example, be asked to show how they will improve community cohesion, diversify the workforce, and improve environmental outcomes. This is a big ask for developers. The successful development of this kind of bid documentation requires close attention to the questions being asked and an early start.
These plans – if prepared properly – will not merely be a box-ticking exercise. They will be living documents that play an important role in the long-term success of each project.
The Government this week kicked off a consultation on the introduction of ‘non-price’ factors into future Contracts for Difference (CfD) rounds. This follows a call for the CfD mechanism to ‘reward positive behavioural changes’ in a report by the Offshore Wind Champion Tim Pick last month.
If non-price criteria are adopted, then there is likely to be alignment between economic development criteria explored within the Celtic Sea lease round and future CfD award criteria. After all, lease rounds and CfD allocations exist within a shared policy framework and are likely to inform each other.
We hope to gain more clarity on The Crown Estate’s plan for reporting requirements for ITT Phase 1 of The Celtic Sea Lease Round shortly. We also look forward to supporting developers in their bid to secure fresh acreage in the world’s most exciting offshore wind market.