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Details Of Pentland Firth Bids Announced

10th June 2009

Following the closure on 15 May 2009 of the deadline for pre-qualified companies seeking leases for wave and tidal energy projects in the Pentland Firth strategic area, The Crown Estate is pleased to announce it has received multiple bids for each of the lease types and all capacities made available for the world's first large scale commercial wave and tidal energy leasing round.

The number and range of both bidders and applications emphasises the importance of the Pentland Firth strategic area to the emerging wave and tidal sector.

Preliminary information on the bids received is now available:

The Crown Estate received a total of 42 applications from 20 bidders for wave and tidal energy leases. These applications range from 10 MW demonstration sites all the way up to the highest band of 200-300 MW commercial sites.

Applications have been received from organisations ranging from small developers through to multi-national energy companies.

The Crown Estate is working in close partnership with Scottish government and Highlands and Islands Enterprise (HIE), supported by strong executive and stakeholder groups. We are all committed to successful wave and tidal device deployment enabling generation of over 700 MW of renewable power from the Pentland Firth strategic area by 2020. The Crown Estate will use option fees paid by developers and an equivalent investment from its own funds in order to de-risk and accelerate the development of tidal and wave energy projects in the area.

The strong response to the competitive tender demonstrates a real drive to develop this industry and create a strong marine energy sector in the UK. However, this is heavily dependent on implementing solutions to a number of issues including: grid, consenting processes, supply chain and economic support for the projects.

Welcoming the bids, First Minister of Scotland Alex Salmond said: "The Scottish government is delighted with the level of applications received by The Crown Estate for the development of marine renewables in the Pentland Firth and Orkney Waters.

"The Pentland Firth has the potential to become the Saudi Arabia of marine power, and the vast potential of this area will deliver more investment, jobs and opportunities to communities in and around the Pentland Firth and Orkney, and benefit to the whole of Scotland.

"Scotland boasts a quarter of Europe's wave and tidal resource, and we are leading the way in developing these technologies through the world's only accredited wave and tidal testing centre, the European Marine Energy Centre in Orkney, and the Scottish government's 10 million Saltire Prize - one of the biggest international government innovation prizes in history.

"I am delighted that The Crown Estate has received a total of 42 applications from 20 bidders for wave and tidal energy leases for the Pentland Firth. The Scottish government will be working closely with The Crown Estate to support the development of marine energy, to ensure we capitalise on our rich natural resources and to make Scotland a world leader in renewables."

Welcoming the investment made to date by organisations in detailed planning and application process for wave and tidal energy leases in the Pentland Firth strategic area, Rob Hastings, Director of the Marine Estate at The Crown Estate, said: "The Crown Estate is delighted to support the growth of the wave and tidal energy industry in the UK, aiming to ensure that we are at the forefront of marine energy generation. Along with our partners we are committed to driving the industry forward. We are working closely with the Scottish government and other stakeholders to look at the issues surrounding supply chain developments and the economic opportunities available to Scotland.

"Our match funding of option fees demonstrate both The Crown Estate's and the developers' commitment to realising the potential of wave and tidal energy in the Pentland Firth strategic area. The Crown Estate believes that targeted investment now will help reassure stakeholders whilst reducing development timescales."

Sandy Cumming, chief executive of HIE said: "The level of developer interest in the Pentland Firth confirms both the potential of these waters and the confidence that companies have in the industry's development. HIE is committed to working with partners to develop marine energy generation and to securing the significant economic benefits it offers the Highlands and Islands."

A detailed and confidential evaluation process of the bids will now be carried out by The Crown Estate to identify those bids that demonstrate the capabilities and commitment necessary to safely deploy wave or tidal energy devices in the Pentland Firth strategic area. Throughout the summer negotiations with prospective developers will commence, prior to awarding agreements for lease.

The pre-qualification period ran from September to November last year and those organisations that passed the pre-qualification assessment went on to submit, via an online application portal, their tenders. This application process follows completion of a Strategic Environmental Assessment (SEA) assessing the potential for wave and tidal energy in Scotland by the Scottish government in 2007.

We will work with industry participants and stakeholders to identify the best locations for future UK wave and tidal energy commercial leasing rounds, which may include further rounds in the Pentland Firth strategic area. Locations outside of Scotland will first need to complete an SEA.

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