Queen will be one of the biggest beneficiaries of the UK’s green agenda
John Lubbock investigates how the royal family could end up making millions of pounds from UK offshore wind farms
Almost all of the UK’s offshore wind power capacity is generated on seabed owned by the Crown Estate – land held as a “sole corporation” of the Queen.
A request for access to information analyzed by the Signature Intelligence Team found that the Crown Estate had earned £ 17.25million from its wind farm property portfolio in 2020/21.
Total profits generated from its wind farm property portfolio were £ 69m in 2020/21, with the Sovereign receiving 25% of those profits – or £ 17.25m – after two years via its annual grant. The rest goes to the treasury, according to a law set out in the 2011 Sovereign Subsidies Act.
Since the onset of the coronavirus pandemic, the Crown Estate’s total revenues have declined due to the loss of rents, in common with the broader economic downturn. However, a provision in the Sovereign Grants Act means that the value of the government block grant provided to the monarch cannot decline. This is the case even if the revenues of the domain of the Crown decrease, the difference being made up by the Consolidated Revenue Fund.
It also means that at a time when a large part of the UK’s population is in financial difficulty, with the poorest on the verge of seeing a £ 20 per week cut in Universal Credit benefits, one of the families with the most The country’s wealthy are seeing their wealth increase thanks to a law that protects their incomes, and the government’s growing investment in wind power.
It places the power of the monarchy at the heart of the Government’s plans for a green transition
Who owns the seabed?
Managing property worth at least £ 14.1 billion, the Crown Estate is one of the largest real estate groups in Europe.
Its total revenue for the year 2020/21 was £ 269.3million, with the Sovereign Grant going to the Monarchy for £ 86.3million. Currently, the Royal Family’s net worth is estimated at £ 20 billion.
In addition to land-based properties – such as Regent Street in London and Balmoral Castle in Scotland – the Crown Estate manages the rights to offshore wind farms up to 200 nautical miles offshore, as well as over half of the UK coastline. . This gives it extremely valuable auction rights for offshore business activities, such as wind farms.
Anyone who wants to build an offshore wind farm therefore has to pay for the Crown Estate. The more offshore wind farms are built, the more profit the Crown estate generates. And while 75% of the profits generated will go to the treasury, 25% ends up filling the royal purse.
Revenues from wind farms are expected to continue to increase. An additional 18 gigawatts (GW) of power could be produced through a recent rental process undertaken by the Crown Estate and Crown Estate Scotland. A spokesperson said Signing time that “this provides a solid basis for the UK government’s 40 GW deployment ambition for 2030”. It also offers a chance to increase its profits from this real estate portfolio by 400% over the next nine years.
UK wind capacity is currently 24.2 GW. Offshore capacity represents 10.4 GW – 43% – of the total. There are an additional 7.2 GW of wind farms under construction on Crown Estate’s seabed, with an additional 2.6 GW securing government support.
Advances in the production of electricity from renewable energies can only be a good thing, as the climate crisis becomes more pressing and the deadline for reaching zero carbon looms. However, Crown Estates’ ownership of the land on which offshore wind farms are built, combined with the guarantee of profits by the Sovereign Grant Act, puts the power of the monarchy at the heart of the government’s plans for a green transition.
A just transition
The government’s 10-point plan for a green industrial revolution, released in November 2020, aims to invest £ 12 billion in green infrastructure during the current legislature. This will include £ 160million investment in modern ports and manufacturing infrastructure for offshore wind farms.
In addition, the government supports the production of wind farms by auctioning renewable energy contracts and guaranteeing companies fixed prices for the energy they produce. The auctions scheduled for December will seek to add 12 GW of power to the UK grid.
This strategy raises questions about the government’s commitment to a “just transition” – a concept that takes into account social justice issues in the transition to a low-carbon economy. In an essay in Just transitionsSundra van Niekirk argues that “the debates on the low carbon transition are not only centered on how electricity is produced, but for whom and by whom”.
However, ownership of the land and plans to auction the contracts to the highest bidder – like rich fossil fuel companies – mean that while the country is in the process of switching to greener energy, it is likely to fail. move to a more just or more egalitarian society.
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The strategy will not change the fact that the capital resources for generating renewable electricity are still owned by large corporations and wealthy investors, as well as the monarchy. Existing energy companies will also generate wealth from the crisis, with BP and Shell being the big bidders for the next round of offshore wind production.
Rebekah Diski, senior researcher at the New Economics Foundation think tank, said Signing time that “a just transition is an opportunity to rewire the economy so that it works for everyone, but this will not happen simply by switching to renewable energies”.
“The benefits of the UK’s considerable wind capacity should benefit workers and communities as we adapt to a changing climate, not reinforce inequalities by supporting wealthy landowners like the Crown Estate and the big energy companies, ”she said.
A spokesperson for the Crown Estate said Signing time: “100% of our net profits – including offshore wind revenues – go to the Treasury, for the benefit of the nation. As noted in our last annual report, we have returned £ 3billion to the public purse over the past decade. “
This statement does not mention that part of the profits from the Crown estate are ultimately returned to the monarchy via the sovereign grant.
The Ministry of Business, Energy and Industrial Strategy said its “White Paper on Energy sets out our plans for the transformation of our energy system, including actions to completely decarbonise the production of electricity. here 2050 ”and that“ this advances the commitments of the 10-point plan, reaffirming the extent to which clean energy is synonymous with jobs and economic growth for the whole country ”.
This article was produced by the Signature Intelligence Team – a collaborative survey project formed by Signing time with Les Citoyens. If you want to know more about the Intelligence team and how to finance his work, click on the button below.
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