The crown estate has generated record profits of almost half a billion pounds from Britain’s offshore windfarms, as talks continue over how much of the windfall should be shared with King Charles.
The royal property manager made £443m in profits in its last financial year, up by almost £130m from the year before, in large part thanks to payments made by renewable energy companies for the right to access the seabed.
Six new offshore windfarms that could power 7m homes have also helped to increase the value of King Charles III’s property manager, which also controls hundreds of properties in London, by 1.3% to £15.8bn as of the end of March.
The crown estate, an ancient portfolio of land and property including more than 200 sites in central London, belongs to the reigning monarch “in right of the crown” but it is not the king’s private property.
The scale of the estate’s renewable energy windfall has delayed a decision by the prime minister and chancellor on what proportion of its wealth should be shared with the king.
Under current rules, the crown estate hands its profits to the Treasury before 25% is returned to the royal household in the form of the sovereign grant, which would put the royal household in line for a windfall of almost £111m for last year.
The sovereign grant was increased in 2017 from its previous level of 15% to help pay for extensive renovations at Buckingham Palace, which are likely to run until 2027.
The funding formula is now being reviewed before an expected multibillion-pound deluge of wind power profits for the crown estate over the next decade, which is likely to cut the payouts made to the royal household.
Earlier this year King Charles asked for the profits from Britain’s growing fleet of offshore windfarms to be used for the “wider public good” rather than as extra funding for the monarchy.
Sir Michael Stevens, the keeper of the privy purse, said: “This year, the crown estate has signed agreements relating to offshore windfarm licences that will see its revenues increase substantially in the coming decade.
“However, his majesty has already made clear to the royal trustees his express wish that more of the crown estate net revenue surplus should be used for the wider public good through an appropriate adjustment to the sovereign grant formula.”
Stevens said the total sum received from the sovereign grant for 2023-24 would remain unchanged at £86.3m.
A royal spokesperson said the amount of income likely to be generated from the auction of offshore wind licences had now been determined but would not be announced until later this year, once the royal trustees had concluded their review of the sovereign grant. The trustees are expected to publish their report shortly.
Molly Scott Cato, a professor of green economics at Roehampton University and a former Green MEP, said the king should waive his rights to the sovereign grant entirely.
“After a year when so many have struggled to pay rocketing energy bills, questions will surely be asked about whether the king should take the 25% of the profit he is legally entitled to,” she said. “He was widely praised when, in January, he made the decision to transfer his share to be spent for the wider public good. I would hope that he repeats this decision at this time of crisis for so many of his subjects.”
Dan Labbad, the crown estate’s chief executive, said the record return to the Treasury generated by offshore windfarms reflected “the immense amount of groundbreaking work” the estate had undertaken “to create a world-leading offshore wind market”.
He said: “We are 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.”
