Britain will raise the guaranteed price for offshore wind power by 11% in this year’s renewable energy auction, the Department for Energy Security and Net Zero (DESNZ) confirmed, as inflation and supply chain disruptions continue to drive up development costs for clean energy projects.
The increased strike price—offered under the government’s Contracts for Difference (CfD) scheme—will rise to £81 per megawatt hour (MWh) in 2012 prices for offshore wind, up from £73 in last year’s round. Floating offshore wind projects, which are still in an earlier stage of commercial deployment, will see their strike price increase to £194 per MWh, up from £176.
“Renewable technologies continue to face macroeconomic uncertainty and supply chain constraints – this is particularly true for wind technologies,” DESNZ said in a document released late Wednesday.
The move comes as the Labour government faces heightened scrutiny over the cost and feasibility of its net-zero ambitions, with political opposition questioning the affordability of the transition. The government has placed offshore wind at the center of its decarbonization strategy, aiming to expand capacity to between 43 and 50 gigawatts (GW) by 2030, from the current level of around 15 GW.
Under the CfD scheme, developers are offered a guaranteed price for electricity. If wholesale market prices fall below this level, the government covers the difference through levies on consumer bills. If wholesale prices exceed the strike price, developers must return the excess to the government.
A DESNZ spokesperson said the new prices are indicative and may clear at lower levels depending on the results of the auction. “The only way we can get bills down for good and protect families and businesses from volatile gas prices is by moving to a clean power system with homegrown, secure power that we control,” the spokesperson added.
Application rounds for the seventh allocation round (AR7) will open in August, with results expected between December 2025 and February 2026.
