Madeleine Finlay speaks to the Guardian’s energy correspondent, Jillian Ambrose, about how offshore windfarms are generating record profits for the crown estate, and why King Charles has asked for the money to be used for the wider public good. She also hears from economist Guy Standing about how the seabed became a source of income for the crown and what it means for our view of the oceans as ‘commons’. Help support our independent journalism at theguardian.com/sciencepod

The UK's new king, Charles, has started off his reign with a windfall.

It comes from the leases of 6 new offshore wind farms, which his sovereign estate holds the right to grant.

These lifted its total annual profits to almost half a billion pounds.

And over the next decade, these licenses are set to earn the king and the treasury up to 9000000000 pounds.

Renewable energy and wind power is more important than ever.

Last week, it was revealed that we're missing our net 0 targets here in the UK on almost every front.

There are fears the government won't meet its carbon reduction targets part of commitments made in the run-up to the UN climate conference in Glasgow 2 years ago.

But some people question whether it's right that decision-making power over this valuable resource lies with the crown.

Historically, the sea and land from our coastlines and beyond belonged to all of us.

And so it also raises questions about who should reap the economic benefits and how the profits from our shores get spent.

From The Guardian, I'm Madeline Finlay And this is Science Weekly.

Gillian Ambrose, you're the Guardian's energy correspondent and you recently wrote about how wind farms are driving record profits for the Crown Estate.

Now, I would say for any international listeners, but frankly, also for me and for UK listeners who aren't totally clear on how the royal family and their assets operate, what is the Crown Estate?

Yeah, well, the easiest way to think about the Crown Estate is to think of it as just a really vast portfolio of land and property.

So, this belongs to the reigning monarch, so now the king, but it's in the right of the Crown, as they say.

So, it's not their private property and it will pass from monarch to monarch.

The reach of this property is really, really huge.

It controls property across large parts of central London, as well as farmland, offices, retail parks, and is also responsible for, perhaps more famously, the Windsor Estate and Ascot Racecourse.

So tell me a bit more about how the Crown Estate is making money from its assets and in particular from wind farms.

Well included in this huge portfolio are the coastlines of England and Wales.

So this means that if you're a renewable energy company and you want to build an offshore wind farm, you effectively need to lease the seabed rights.

So think of it as paying rent to the Crown.

What's happened though is that the rent is much, much higher than anyone expected, say, 10 years ago.

And that's because if you want the right to build your wind farm, if you want to compete for these seabed licenses, you've had to take part in an auction.

And the huge success of the offshore wind industry in the UK in recent years has meant that these auctions are really, really hard fought.

They're fiercely competitive and this has just driven prices up much higher than we could have expected.

So, every year they're going to be paying huge sums to the Crown Estate and they'll be doing that for the duration that it takes them to develop the wind farm.

So that is probably likely to be around 10 years.

All that money being generated, it doesn't go straight to the king or the royal family, does it?

So how do they make money from the Crown Estate?

The money from the Crown Estate doesn't go to the Crown directly.

But there is an agreement called the Sovereign Grant through which the Treasury will give a portion of that back to the Royal Household.

So at the moment, that is 25% of the profits that the Crown Estate makes, and about 10% of that is earmarked for the works that are having to take place on Buckingham Palace, so to cover the cost of those.

That said, the sovereign grant level is about to change.

King Charles himself would actually like to see it be a little bit lower.

And this is partly because the profits from the wind farms are so much higher than expected, as It's a lot more money than the royal household would ever expect to get from the Treasury.

He's called out and said that it would be a good thing if more of this money was put to work for the public good, which is quite an interesting idea and 1 which has been quite well received.

I wondered how the seabed had ended up in the hands of the Crown estate.

For that I went to Guy Standing, an economist and author of The Blue Commons, rescuing the economy of the sea, in which he argues that we, the people, should also have some say in what happens to the seabeds, and that the profits derived from that should be, well, common.

First, though, I asked him to explain to me how the setup we have today began.

The story, in fact, goes back to ancient Rome.

Because in ancient Rome, the Emperor Justinian asked all his lawyers to come up with a common law system.

And in that common law system of AD 534, there were 4 types of property.

There were private property, state property, nobody's property, and common property.

And a landmark decision was made then, which has been taken through the Magna Carta, the Charter of the Forest of 1217, all the way through common law in all democracies.

And common property included the sea, the seabed, the seashores, and everything in the sea.

And The British Constitution accepted that for over a thousand years.

It was something that was absolutely taken for granted, and it was actually enshrined in law by King Edward I in

and it remains part of the constitution throughout our history.

Yet what's been happening in the last 60 years or so is a plunder of the commons, a plunder of the blue commons, that took off in the early 1960s.

Until the 1960s, there was no legislation declaring crown ownership below the low-water mark.

But as North Sea oil and gas drilling began to take off, companies wanted to know who owned what.

So in 1964, the Continental Shelf Act set out that the ownership of the UK's coastal waters and seabed laid with the Crown Estate.

It was done thinking that the Crown, the monarchy, should remain the steward of common property, preserving the value and the shape of the commons for not only this generation but future generations as well.

Now what has happened to make this a highly lucrative affair for the Crown Estate is several Acts of Parliament.

And the most important was the Energy Act of

passed by New Labour, which allowed the Crown Estate to take part of the revenue from offshore wind and wave power electricity.

introduced a new measure in which the Crown Estate was entitled to

of all its revenue from its commercial activities.

So today, exploitation rights of the UK's seabeds remain with the Crown.

And in 2021, they held the first auction of seabed licences in a decade, clearing the way for 6 new offshore wind farms.

Gillian, what do we know about the companies that are securing these licences?

Well, some of these companies might surprise you.

The 1 that bid the most aggressively for the right to build its offshore wind farms is a little-known company called BP.

They raised eyebrows by bidding £462 million a year for the option to develop 2 offshore wind farms in the Irish Sea.

So they will be paying that for every year that they're developing the wind farm until the wind farm is operational.

And that's before they've even started paying for building the turbines.

So it shows just how in demand these seabed licences are.

OK, so offshore wind is going well and we do need all this green energy here in the UK, the government has a target to decarbonise the UK's electricity generation fully by

I mean, well, but It has to be tempered by saying there's a long way to go.

So last year, wind power made up 26, 27 percent of the UK's electricity mix, and that's roughly half onshore wind farms and offshore wind farms.

That said, gas made up almost 40% of the electricity mix.

So there is a long way to go and there is much more renewable energy and other low carbon forms of energy that are needed to make that happen.

Do we have the infrastructure ready for this?

How are we going to integrate all this green energy into the UK's electricity grid?

I think there needs to be a bit more joined up thinking, frankly, about how to make this work.

The problem that we're seeing in parts of the energy sector more broadly is that there's so many people wanting to connect to the grid.

Solar farm developers, battery storage operators, everybody wants to plug in and that's great, that's what we want, but doing that requires a lot of upgrades.

So, you know, substations, pylons, overhead cables, and it's something that government and National Grid and the energy regulator all actively trying to sort out at the moment.

So Gillian, there's still some progress to be made before we get all of this renewable energy, but we do already have this huge windfall coming in.

And you mentioned earlier that King Charles has asked for the profits from wind farms to be used for the wider public good.

Are there other places that we can look to that are doing things differently?

Yeah, not so much in the offshore wind space.

In many ways, the UK is a leader and really has an opportunity to do something pioneering in how it handles the sort of influx of cash.

But when we look to countries like, say, Norway, with their giant sovereign wealth fund, which is built on oil, that provides quite a nice example of what could happen.

So Norway's oil wealth came around the same time as the UK's naughty oil wealth.

The difference though is that they siphoned it off and it was all part of this fund, which is now a trillion dollars and plays a huge role in the economic and financial success of Norway.

Whereas, I think the UK's oil wealth, some might say, was really just used to fund a sort of Thatcher-era cutting of taxes.

So there's nothing really to show for our North Sea oil boom the way that Norway has.

So it would be great not to repeat that mistake, if I can be so bold.

But we've got this opportunity now where we've got a lot of money coming into offshore wind.

So this could be a separate fund that would perhaps help support battery storage, which would make better use of the renewable energy, which comes and goes depending on the weather, or, I don't know, even helping insulate homes.

King Charles has been quite clever in not saying specifically what he thinks it should be used for.

But this idea of using the money for the wider public good makes sense.

You know, these coastlines are really all of ours.

And I think a lot of people would say the idea that it's part of the Crown Estate is maybe slightly archaic.

But we'll have to, it's not for me to decide, so we'll have to see what they come up with.

Dan Labbard, the Crown Estate's chief executive, said the record return to the Treasury generated by offshore wind farms reflected the immense amount of groundbreaking work the estate had undertaken to create a world-leading offshore wind market.

He continued, We're also laying the foundations for our long-term impact by seeking to address areas of national interest such as nature recovery, economic renewal and regeneration, the future of sustainable agriculture, and helping to secure London's position as a world-class city.

According to Guy, we should all be paying attention to what happens to our blue resources, and not just those controlled by the Crown Estate.

Here we are in the beginning of a new era of renewable energy from the sea, of minerals, of deep sea mining and all sorts of things where the economy of the sea is going to become enormously important.

Therefore the principles of governance and the principles of how you treat the resources are going to become dramatically more important.

We also have to remember that it's not just our seabed, it's our rivers, as we know they're covered with sewage these days, and our beaches covered with sewage.

It's also our ports, it's our seaweed, it's our sea sand, it's the energy that's out there, the cobalt and other minerals that are waiting to be mined.

We have a duty of governance to ensure the commons are treated with the utmost respect and that is not the case today.

A big thanks to both Guy Standing and to Gillian Ambrose.

You can read all of Gillian's brilliant reporting on theguardian.com.

And for more on the wealth and finances of the royal family, do check out the Guardian's excellent podcast series, The Cost of the Crown.

Just search wherever you get your podcasts.

And before you go, you also need to know about Guardian Jobs, our job platform that connects you with like-minded people to build rewarding careers.

Find a workplace that ticks all of your boxes.

With high quality roles in sustainability, government, social care, charity and education, you're going to be spoilt for choice.

Search for Guardian Jobs to find your next role.

The producers were me, Madeline Finlay and Silas Gray.

The sound design was by Tony Onuchukwu and the executive producer was Ellie Burey.


Speaker 0: This is The Guardian.

Speaker 1: The UK's new king, Charles, has started off his reign with a windfall. It comes from the leases of 6 new offshore wind farms, which his sovereign estate holds the right to grant. These lifted its total annual profits to almost half a billion pounds. And over the next decade, these licenses are set to earn the king and the treasury up to 9000000000 pounds. Renewable energy and wind power is more important than ever.

Last week, it was revealed that we're missing our net 0 targets here in the UK on almost every front.

Speaker 0: There are fears the government won't meet its carbon reduction targets part of commitments made in the run-up to the UN climate conference in Glasgow 2 years ago.

Speaker 1: But some people question whether it's right that decision-making power over this valuable resource lies with the crown. Historically, the sea and land from our coastlines and beyond belonged to all of us. And so it also raises questions about who should reap the economic benefits and how the profits from our shores get spent. From The Guardian, I'm Madeline Finlay And this is Science Weekly. Gillian Ambrose, you're the Guardian's energy correspondent and you recently wrote about how wind farms are driving record profits for the Crown Estate.

Now, I would say for any international listeners, but frankly, also for me and for UK listeners who aren't totally clear on how the royal family and their assets operate, what is the Crown Estate?

Speaker 2: Yeah, well, the easiest way to think about the Crown Estate is to think of it as just a really vast portfolio of land and property. So, this belongs to the reigning monarch, so now the king, but it's in the right of the Crown, as they say. So, it's not their private property and it will pass from monarch to monarch. The reach of this property is really, really huge. It controls property across large parts of central London, as well as farmland, offices, retail parks, and is also responsible for, perhaps more famously, the Windsor Estate and Ascot Racecourse.

Speaker 1: So tell me a bit more about how the Crown Estate is making money from its assets and in particular from wind farms.

Speaker 2: Well included in this huge portfolio are the coastlines of England and Wales. So this means that if you're a renewable energy company and you want to build an offshore wind farm, you effectively need to lease the seabed rights. So think of it as paying rent to the Crown. What's happened though is that the rent is much, much higher than anyone expected, say, 10 years ago. And that's because if you want the right to build your wind farm, if you want to compete for these seabed licenses, you've had to take part in an auction.

And the huge success of the offshore wind industry in the UK in recent years has meant that these auctions are really, really hard fought. They're fiercely competitive and this has just driven prices up much higher than we could have expected. So, every year they're going to be paying huge sums to the Crown Estate and they'll be doing that for the duration that it takes them to develop the wind farm. So that is probably likely to be around 10 years. So boom times for the Crown Estate.

Speaker 1: All that money being generated, it doesn't go straight to the king or the royal family, does it? So how do they make money from the Crown Estate? How does that work?

Speaker 2: That's right. The money from the Crown Estate doesn't go to the Crown directly. It all goes to the Treasury. But there is an agreement called the Sovereign Grant through which the Treasury will give a portion of that back to the Royal Household. So at the moment, that is 25% of the profits that the Crown Estate makes, and about 10% of that is earmarked for the works that are having to take place on Buckingham Palace, so to cover the cost of those.

That said, the sovereign grant level is about to change. King Charles himself would actually like to see it be a little bit lower. And this is partly because the profits from the wind farms are so much higher than expected, as It's a lot more money than the royal household would ever expect to get from the Treasury. He's called out and said that it would be a good thing if more of this money was put to work for the public good, which is quite an interesting idea and 1 which has been quite well received.

Speaker 1: I wondered how the seabed had ended up in the hands of the Crown estate. For that I went to Guy Standing, an economist and author of The Blue Commons, rescuing the economy of the sea, in which he argues that we, the people, should also have some say in what happens to the seabeds, and that the profits derived from that should be, well, common. First, though, I asked him to explain to me how the setup we have today began.

Speaker 3: The story, in fact, goes back to ancient Rome. Because in ancient Rome, the Emperor Justinian asked all his lawyers to come up with a common law system. And in that common law system of AD 534, there were 4 types of property. There were private property, state property, nobody's property, and common property. And a landmark decision was made then, which has been taken through the Magna Carta, the Charter of the Forest of 1217, all the way through common law in all democracies.

And common property included the sea, the seabed, the seashores, and everything in the sea. And The British Constitution accepted that for over a thousand years. It was something that was absolutely taken for granted, and it was actually enshrined in law by King Edward I in

Speaker 0: 1297

Speaker 3: and it remains part of the constitution throughout our history. Yet what's been happening in the last 60 years or so is a plunder of the commons, a plunder of the blue commons, that took off in the early 1960s.

Speaker 1: Until the 1960s, there was no legislation declaring crown ownership below the low-water mark. Sovereignty was by convention. But as North Sea oil and gas drilling began to take off, companies wanted to know who owned what. So in 1964, the Continental Shelf Act set out that the ownership of the UK's coastal waters and seabed laid with the Crown Estate.

Speaker 3: It was done thinking that the Crown, the monarchy, should remain the steward of common property, preserving the value and the shape of the commons for not only this generation but future generations as well.

Speaker 1: How did we get to where we are today?

Speaker 3: Now what has happened to make this a highly lucrative affair for the Crown Estate is several Acts of Parliament. And the most important was the Energy Act of

Speaker 0: 2004,

Speaker 3: passed by New Labour, which allowed the Crown Estate to take part of the revenue from offshore wind and wave power electricity. And then George Osborne in

Speaker 0: 2011

Speaker 3: introduced a new measure in which the Crown Estate was entitled to

Speaker 0: 25%

Speaker 3: of all its revenue from its commercial activities.

Speaker 1: So today, exploitation rights of the UK's seabeds remain with the Crown. And in 2021, they held the first auction of seabed licences in a decade, clearing the way for 6 new offshore wind farms. Gillian, what do we know about the companies that are securing these licences? Where are they from?

Speaker 2: Well, some of these companies might surprise you. The 1 that bid the most aggressively for the right to build its offshore wind farms is a little-known company called BP. So, yeah, that's the oil giant. They raised eyebrows by bidding £462 million a year for the option to develop 2 offshore wind farms in the Irish Sea. So they will be paying that for every year that they're developing the wind farm until the wind farm is operational.

And that's before they've even started paying for building the turbines. So it shows just how in demand these seabed licences are.

Speaker 1: OK, so offshore wind is going well and we do need all this green energy here in the UK, the government has a target to decarbonise the UK's electricity generation fully by

Speaker 0: 2035.

Speaker 1: How are we getting along with that?

Speaker 2: I mean, well, but It has to be tempered by saying there's a long way to go. So last year, wind power made up 26, 27 percent of the UK's electricity mix, and that's roughly half onshore wind farms and offshore wind farms. That said, gas made up almost 40% of the electricity mix. So there is a long way to go and there is much more renewable energy and other low carbon forms of energy that are needed to make that happen.

Speaker 1: Do we have the infrastructure ready for this? How are we going to integrate all this green energy into the UK's electricity grid? Are we able to do that now?

Speaker 2: That's a great question. The short answer is no. I think there needs to be a bit more joined up thinking, frankly, about how to make this work. The problem that we're seeing in parts of the energy sector more broadly is that there's so many people wanting to connect to the grid. Solar farm developers, battery storage operators, everybody wants to plug in and that's great, that's what we want, but doing that requires a lot of upgrades.

So, you know, substations, pylons, overhead cables, and it's something that government and National Grid and the energy regulator all actively trying to sort out at the moment.

Speaker 1: So Gillian, there's still some progress to be made before we get all of this renewable energy, but we do already have this huge windfall coming in. And you mentioned earlier that King Charles has asked for the profits from wind farms to be used for the wider public good. But what does that mean in practice? Are there other places that we can look to that are doing things differently?

Speaker 2: Yeah, not so much in the offshore wind space. In many ways, the UK is a leader and really has an opportunity to do something pioneering in how it handles the sort of influx of cash. But when we look to countries like, say, Norway, with their giant sovereign wealth fund, which is built on oil, that provides quite a nice example of what could happen. So Norway's oil wealth came around the same time as the UK's naughty oil wealth. The difference though is that they siphoned it off and it was all part of this fund, which is now a trillion dollars and plays a huge role in the economic and financial success of Norway.

Whereas, I think the UK's oil wealth, some might say, was really just used to fund a sort of Thatcher-era cutting of taxes. It's all been used up. So there's nothing really to show for our North Sea oil boom the way that Norway has. So it would be great not to repeat that mistake, if I can be so bold. But we've got this opportunity now where we've got a lot of money coming into offshore wind.

So this could be a separate fund that would perhaps help support battery storage, which would make better use of the renewable energy, which comes and goes depending on the weather, or, I don't know, even helping insulate homes. King Charles has been quite clever in not saying specifically what he thinks it should be used for. That might be seen as an overstep. But this idea of using the money for the wider public good makes sense. You know, these coastlines are really all of ours.

And I think a lot of people would say the idea that it's part of the Crown Estate is maybe slightly archaic. But we'll have to, it's not for me to decide, so we'll have to see what they come up with.

Speaker 1: Dan Labbard, the Crown Estate's chief executive, said the record return to the Treasury generated by offshore wind farms reflected the immense amount of groundbreaking work the estate had undertaken to create a world-leading offshore wind market. He continued, We're also laying the foundations for our long-term impact by seeking to address areas of national interest such as nature recovery, economic renewal and regeneration, the future of sustainable agriculture, and helping to secure London's position as a world-class city. According to Guy, we should all be paying attention to what happens to our blue resources, and not just those controlled by the Crown Estate.

Speaker 3: Here we are in the beginning of a new era of renewable energy from the sea, of minerals, of deep sea mining and all sorts of things where the economy of the sea is going to become enormously important. Therefore the principles of governance and the principles of how you treat the resources are going to become dramatically more important. We also have to remember that it's not just our seabed, it's our rivers, as we know they're covered with sewage these days, and our beaches covered with sewage. It's also our ports, it's our seaweed, it's our sea sand, it's the energy that's out there, the cobalt and other minerals that are waiting to be mined. We have a duty of governance to ensure the commons are treated with the utmost respect and that is not the case today.

Speaker 1: A big thanks to both Guy Standing and to Gillian Ambrose. You can read all of Gillian's brilliant reporting on theguardian.com. And for more on the wealth and finances of the royal family, do check out the Guardian's excellent podcast series, The Cost of the Crown. Just search wherever you get your podcasts. And before you go, you also need to know about Guardian Jobs, our job platform that connects you with like-minded people to build rewarding careers.

Flexibility, values, salary. Find a workplace that ticks all of your boxes. With high quality roles in sustainability, government, social care, charity and education, you're going to be spoilt for choice. Search for Guardian Jobs to find your next role. And that's it for today.

The producers were me, Madeline Finlay and Silas Gray. The sound design was by Tony Onuchukwu and the executive producer was Ellie Burey. We'll be back on Thursday. See

Speaker 2: You

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Why are windfarms turning record profits for the crown estate?