The UK government has launched a consultation on proposed reforms to this year's AR7 Contracts for Difference (CfD) auction, aiming to accelerate the development of offshore wind projects as part of its strategy to meet clean energy targets by 2030.
The UK, which already hosts the world's three largest operational offshore wind farms, is seeking to expand its renewable energy capacity to reach a target of 43-50GW by 2030. The proposed reforms aim to streamline the planning process and enhance funding efficiency, ensuring the country remains on track to become a clean energy superpower.
Key proposals include relaxing the eligibility criteria for planning consent for fixed-bottom offshore wind projects to speed up development timelines. The government also plans to revise the process of setting and publishing offshore wind budgets, improving the overall allocation of funding. Additionally, the government is proposing an extension to the CfD contract term beyond the current 15 years, which could make renewable energy projects more cost-effective for developers.
Energy Secretary Ed Miliband emphasized the importance of these reforms, stating, “Last year, we celebrated delivering the most successful auction round in history – now we want to go even further. British families and businesses are bearing the cost of the reliance on petrostates and dictators who set the price of gas on the global market. Our bold new reforms will give developers the certainty they need to build clean energy in the UK, supporting our mission to become a clean energy superpower and bring down bills for good.”
The CfD scheme, which is the UK government's primary mechanism for supporting low-carbon electricity generation, incentivizes investment in renewable energy by providing developers with protection against volatile wholesale prices. The scheme has already seen six auctions, with last year's AR6 round securing 128 renewable energy projects, amounting to 9.6GW of capacity, enough to power around 11 million homes.
The UK currently has 30.7GW of offshore wind capacity either installed or committed, with an additional 7.2GW consented. The proposed reforms aim to secure additional offshore wind capacity at competitive prices, delivering value for money for UK consumers while supporting the country's clean energy transition.
The consultation will remain open until March 21, with a government response expected prior to the AR7 auction.
