A Royal Family Energy Windfall
It’s good to be the Queen. British monarch Elizabeth II, who celebrated 60 years on the throne in June, may see her income rise 16 percent after the Crown Estate’s earnings increased and lawmakers changed the way royal finances are calculated. The monarch will be entitled to £36 million ($56 million) for the fiscal year that runs from April 2013 through March 2014, up from £31 million for the current year.
The Crown Estate manages real estate surrendered by the monarchy in 1760 in exchange for annual payments. Its profit increased 4 percent to £240.2 million in fiscal 2012, which ended March 31, thanks in part to revenue from offshore leases for wind farms, which more than doubled. The former landholdings for the royal family include the seabed around Britain extending to 12 nautical miles offshore. “They’re a landmark set of results,” Crown Estate Chief Executive Officer Alison Nimmo said in an interview at the corporation’s office off Regent Street in central London.
Another positive development for the royal family’s finances involves the sovereign grant, the amount the government provides to cover expenses the Queen incurs in her official duties. Under rules adopted by Parliament last year, it is pegged at 15 percent of the profit generated two years earlier by the Crown Estate. Previously, the amount was set once every 10 years by the Treasury and supplemented by grants.
The Crown Estate has offered leases for offshore sites since 2000 to companies including Centrica, Dong Energy, and Siemens. The parks in operation now generate 1.5 percent of the U.K.’s electricity production, and that should double next year as more sites become operational, lifting income. The Crown Estate also oversees 36 sites across the U.K. earmarked for tidal or wave power generation, Nimmo says.
The Queen’s other sources of income are the estates and assets owned by the Duchy of Lancaster as well as her privately owned estates, Balmoral in Scotland and Sandringham in eastern England. The monarch owns the royal palaces, most of the royal art collection, and the Crown Jewels on behalf of the nation and therefore is prohibited from selling them for her personal gain.
The Crown Estate also is the majority owner of Regent Street in central London, along with half the land in the St. James district, as well as shopping centers across the U.K., golf courses, Ascot Racecourse, and farms.
Nimmo, 48, joined the Crown Estate in January after overseeing the design and construction of most venues for the London 2012 Olympic Games. She says she is proceeding with the next phases of a £1 billion project to revamp Regent Street in London’s West End. Work done so far has transformed it into one of the U.K.’s premier shopping strips. A £500 million makeover of the St. James neighborhood also is under way. Says Nimmo: “We are making serious investment in the development pipeline.”