Crown Estate targets energy giants for its wind-farm plans

E.ON, Centrica and other major energy groups have been approached by the Crown Estate over plans to build offshore wind farms large enough to supply millions of homes with power.

The Crown Estate, which owns the seabed around Britain, told wind farm developers last month how to bid for the projects in what the wind industry has dubbed "round 3".

One method that is under discussion is for the Crown Estate to auction off blocs suitable for development in the same way that acreage is auctioned to oil companies.

The Crown Estate, which will run the process with the Department of Trade and Industry, will meet developers early next month at the British Wind Energy Association offshore conference to discuss the plans.

Four years ago in "round 2", the Crown Estate announced the construction of 15 offshore wind farms, such as the Thames Array, which would generate up to seven gigawatts of electricity, enough to provide power to four million households.

Now the Crown Estate has come under pressure from energy groups to get moving with the next phase of wind farm development.

The Government has an "aspiration" - which could become a firm target when this week's energy review is concluded - for a fifth of the UK's electricity to come from renewable sources by 2020, mostly from wind.

The European Commission appears to have overtaken this ambitious plan. It has agreed in principle to impose a legally binding target for 20 per cent of all energy (which includes transport and heating as well as electricity) to be generated from renewable sources.

In Britain, experts estimate, renewables are most easily used to generate electricity than to provide energy for transport and heating. Therefore, to meet this European target, about 35 per cent of electricity would have to be generated from renewable sources by 2020.