The Crown Estate has reported a £1bn profit for the third year running, fuelled by a surge in revenue from offshore windfarm leases. The estate, which manages the royal family's property portfolio, announced on Wednesday that its net revenue profit for the financial year ending in March reached £1.1bn, up from £1bn the previous year.
Offshore windfarm boom drives profits
The profits were largely driven by the Crown Estate's seabed leasing programme, which has seen a boom in offshore windfarm developments. The estate has signed leases for six new offshore wind projects in the past year, with a combined capacity of 8GW. The deals are expected to generate billions of pounds in revenue over the coming decades.
According to the Crown Estate, the profits from its seabed leases have increased by 40% year-on-year, reaching £950m. The remaining profits came from its traditional property portfolio, which includes Regent Street in London and rural landholdings.
Profits go to UK Treasury
The Crown Estate's profits are handed over to the UK Treasury, which then distributes a portion to the royal family via the Sovereign Grant. The Sovereign Grant is set at 25% of the Crown Estate's profits, with the remainder going to the government. This year, the Sovereign Grant will be £132m, up from £86m last year.
King Charles, who ascended the throne in 2022, has seen the Crown Estate's profits surge during his reign. The estate's profits have doubled since 2021, when they stood at £500m. The increase has been driven by the offshore windfarm boom, which has been accelerated by the government's net-zero targets.
Criticism over royal finances
The surge in profits has drawn criticism from republican groups, who argue that the royal family is benefiting unfairly from the transition to renewable energy. Graham Smith, CEO of Republic, said: "It is outrageous that the royal family is profiting from the green energy transition. The Crown Estate's profits should be used to fund public services, not to line the pockets of the monarchy."
The Crown Estate has defended its role, stating that the profits generated from offshore wind leases are a result of its long-term stewardship of the seabed. A spokesperson said: "The Crown Estate has been managing the seabed for centuries, and our leasing programme is designed to maximise value for the nation. The profits are handed over to the Treasury, which then decides how to allocate them."
Future outlook
The Crown Estate expects profits to continue rising as more offshore wind projects come online. The estate has identified potential for up to 50GW of offshore wind capacity in UK waters, which could generate billions of pounds in additional revenue. However, the estate also faces challenges, including rising costs and supply chain constraints in the offshore wind sector.
The Treasury has welcomed the increased profits, with a spokesperson saying: "The Crown Estate's success is good news for the public finances. The profits help to fund essential public services, and we are committed to ensuring that the estate continues to deliver value for the nation."
