Crown Estate an 'extra cost' 

Northern isles MP yesterday (Tuesday) blasted the Crown Estate for taking “as much as they can” but offering “very little in return”.

His scathing attack came after figures released by the UK government showed the Crown Estate had last year earned more than £700,000 in seabed rent from offshore renewable energy projects, an increase of more than 28,000 per cent compared to 2002/03.

Rob Hastings, director of the marine estate at the Crown Estate responded by saying the income reflected on the success of the offshore renewable industry.

The government figures, released in a written answer to questions by Mr Carmichael, show that seabed rent income for offshore wind turbines has steadily risen from £2,500 in 2002/03 to £181,000 in 2004/05 and £721,000 in 2006/07.

Yesterday, The Times newspaper reported that energy industry sources had reported that the Crown Estate could earn as much as £100 million a year from Britain’s booming offshore renewable energy industry by 2020.

The Crown Estate owns all the seabed out to the 12 miles limit and profits made through rent is paid to the Treasury.

Mr Carmichael said the Crown Estate had a history of taking money for doing nothing from its ownership of the seabed.

“These figures show graphically the way in which they will take as much as they can but offer very little in return.

“The Crown Estate are simply an extra cost to the renewable industry with no discernable benefit.”

He added he now understood why the Crown Estate was so “enthusiastic” about a proposed sub sea cable running along the east coast of the country. A study commissioned by the Crown Estate found such a cable to be viable in a report published last month.

“Such a cable could be a good thing, but if it is to be taxed by the Crown Estate Commissioners then money which could be used to develop green energy will instead go straight back to the Treasury,” Mr Carmichael said.

Mr Hasting said: “The Crown Estate charges rent to offshore wind developers for placement of turbines on the seabed. This is typically around 1per cent of the value of electricity generated by offshore windfarms – so the £721,000 figure represents rental income from an industry that, across the UK, made around £70 million in 2006/7.

“All this money is paid to the Treasury for the benefit of all UK taxpayers. To date, the Crown Estate has not received any income from offshore renewable projects in Scotland.”

He added that Crown Estate was supporting the renewables industry, including the EMEC centre in Orkney which uses the seabed to test tidal energy devices.

“We expect to invest £185 million in Scottish marine projects over the next five years alone.

“Recent examples of our work include exploring the viability of an east coast sub-sea cable from Shetland – a development which could boost employment in the isles – and working with partner organisations including the Scottish Government on the Pentland Firth Tidal Energy Project,” he said.

The figures mentioned yesterday were of no great concern to windfarm developers locally as seabed rent was not directly an issue for them.

A spokesman for Viking Energy said its project was onshore and Crown Estate rent charges would only be a minor part of the overall charges payable to the owner of a future subsea cable that is proposed to connect Shetland with mainland Scotland.

By Hans J. Marter

The Shetland News

13 February 2008