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Cost of offshore wind increased by monopoly ownership of seabed, alleges campaign group

The Crown Estate has been accused of pushing up the costs of offshore wind power by exploiting its monopoly ownership of the seabed, adding to consumer bills and stunting the industry. 

Greenpeace, the environmental lobby group, alleges that the Crown Estate has created excessive costs for wind power developers and hefty profits for itself by designing an “aggressive” auction process for seabed rights. 

It says the Crown Estate, a public corporation that runs the British monarchy’s legacy portfolio of land and property holdings, has a legal duty not to exploit its monopoly position as owner of the seabed around England and Wales, but has now breached this. The seabed around Scotland is owned by Crown Estate Scotland.

Greenpeace is threatening to sue the Crown Estate unless it conducts future leasing rounds differently.  

“The profits derived from this approach . . . have been enormous,” Greenpeace said in a letter to the Crown Estate sent in June, seen by the Financial Times. 

“However, this has come at the expense of the development of offshore wind power in the UK, which is essential to the UK meeting its net zero ambition and binding international and domestic [carbon] targets.”

The Crown Estate has rejected Greenpeace’s claims, arguing that Greenpeace has misinterpreted the Crown Estate’s legal duties.

The row comes at a critical moment for the UK’s offshore wind industry, which has developed rapidly over the past decade to become the second-largest-market apart from China, supplying about 17 per cent of the UK’s electricity last year.

The UK government wants to roughly triple offshore wind capacity by 2030 in order to meet its goal of decarbonising the electricity sector by then. 

But the sector has been hit by rising costs and supply chain strains over the past few years.

Greenpeace argues that the Crown Estate’s auction of seabed leasing sites in 2021 contributed to these issues by introducing competitive bidding, as opposed to setting a fixed price as it had in previous years, and running several cycles of sealed bids. 

It says it also drove up wider system costs by pushing more development towards Scottish waters, where fees were capped in 2021 by Crown Estate Scotland, albeit at 10 times the previous level.

Scottish wind farms are often paid to switch off because the grid is not sufficiently robust to bring the power south to where demand is highest.

Strong competition for the rights to the 2021 leasing round led to developers agreeing to pay annual fees totalling £879mn to the Crown Estate.

Greenpeace argues the Crown Estate has a duty under the Crown Estate Act of 1961 to “exclude the monopoly value” from its ownership of the seabed when setting lease prices. 

Roger Bright, former chief executive of the Crown Estate, said in his evidence to Parliament in 2010: “The first thing to say is that our Act expressly says that we may not take advantage of our monopoly position”.

But the Crown Estate now argues that the law merely allows it to not seek the maximum it could from its monopoly position, according to legal correspondence seen by the FT.

Fuelled by the ongoing profits from its round 4 fees, the Crown Estate’s staff numbers have doubled to 868 in 2024/25 and the chief executive Dan Labbad’s annual pay has leapt to almost £1.95mn compared with the £375,000 paid to his predecessor.

In a statement Will McCallum, co-executive director of Greenpeace, said: “The Crown Estate should be managing the seabed in the interest of the nation and the common good, not as an asset to be milked for profit.”

The Crown Estate said: “Our focus is on successfully enabling the UK to move forward with its clean energy transition while reducing our reliance on other countries and volatile energy markets, as well as supporting nature and job creation through the supply chain.

“The Crown Estate has worked in partnership with government and industry over the last 25 years to establish the UK as a world-leading market for offshore wind development that now meets the equivalent electricity needs of over half of UK households and supporting tens of thousands of jobs.”

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