Record breaking auction for offshore wind

Britain has secured a record 8.4 gigawatts (GW) of offshore wind capacity through the latest Contracts for Difference Allocation Round 7 (AR7), establishing the largest single offshore wind procurement in both UK and European history. This achievement marks a pivotal advancement in the government’s drive to expand clean energy infrastructure, reduce national reliance on imported fossil fuels, and meet escalating electricity demand.

The auction, which follows last year’s unsuccessful AR5 round, represents a significant turnaround and reinforces investor confidence in the UK’s commitment to renewable energy targets. The capacity awarded during AR7 is sufficient to generate clean electricity for more than 12 million homes, aligning with the government’s ambition to deliver a decarbonised power sector by 2030. Notably, the agreed price of fixed offshore wind came in at £90.91 per megawatt hour, some 40 percent lower than the cost of developing and operating a new gas-powered facility, which stands at £147 per megawatt hour. This evidences the cost-competitiveness of renewable technology and underlines its role as a cornerstone for long-term affordability and energy stability.

The projects to receive contracts under AR7 span all UK regions, including flagship schemes such as Dogger Bank South off Yorkshire and Norfolk’s coast, the massive Berwick Bank development in the North Sea, and the Awel Y Mor project in Wales—the latter marking the first Welsh offshore wind contract award in over a decade. Floating wind technologies will also take significant steps forward, with developments such as Erebus in the Celtic Sea and Pentland in Scotland securing contract backing, reflective of rising investor interest and government support through entities like the National Wealth Fund.

The results of this round are expected to unlock approximately £22 billion in private investment. This influx of capital will drive the creation of about 7,000 skilled jobs, supporting manufacturing, logistics, and construction activities from the Scottish Highlands to the South West, and delivering meaningful supply chain opportunities nationwide. For suppliers, subcontractors, and main contractors, the scale and geographic spread of these developments will present substantial business openings across component manufacturing, marine engineering, installation, operations, and ongoing maintenance.

This latest procurement round positions the UK as a leader in the offshore wind sector, providing long-term revenue predictability and stimulating economic growth throughout the sector. The government’s measures to reduce household energy costs – including a budget provision to remove £150 from average energy bills – are bolstered by this significant expansion in renewables. As Britain advances towards its 2030 clean energy objectives, the AR7 results reaffirm the nation’s commitment to energy sovereignty, cost control, and a dynamic, job-creating energy market. Market participants seeking growth or market entry are advised to closely monitor related supply chain opportunities presented by this unprecedented wave of offshore wind infrastructure.

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