UK Industry Calls for Higher Offshore Wind Budget in Upcoming CfD Auction

Industry groups have urged the UK government to increase the budget for offshore wind projects in the upcoming seventh Contracts for Difference (CfD) auction, warning that the current allocation risks limiting investment in new capacity. The Department for Energy Security and Net Zero (DESNZ) on Monday confirmed a total of £1.08 billion will be made available for the AR7 auction, with £900 million for fixed-bottom projects and £180 million for floating wind. The bidding window is due to open next month. Trade association RenewableUK said the announced figure “will not maximise investment” and could cover only around one-quarter of the 20 gigawatts (GW) of capacity eligible to compete in this year’s round. “Given the amount of competition in this year’s auction, we expect to see competitively priced bids, so the government should adjust the budget to maximise procurement, which could attract up to £53 billion in private investment in the UK economy,” said Ana Musat, RenewableUK’s executive director of policy and engagement. Musat added that further support for early floating wind projects was essential to strengthen supply chains and lower costs. “Every gigawatt of new offshore wind capacity we install boosts our economy by £2–3 billion, and with the right level of support we can more than double the number of offshore wind jobs from 40,000 now to 95,000 by 2030,” she said. Scottish Renewables chief executive Claire Mack also called on ministers to “carefully consider” the budget to reassure investors of London’s commitment to offshore wind development off Scotland’s coasts. “This year’s auction is a pivotal moment to inject fresh momentum into Scotland’s offshore wind sector and build on the strategic investments made in our supply chain to date,” Mack said. “An auction that fails to deliver for Scotland will seriously undermine our ability to maintain and secure the growth that is essential for energy security.” She warned that the proposed budget “would significantly restrict that value from reaching consumers and communities” and said government support was vital to maintain progress in Scottish fixed-bottom and floating wind projects. Chris Stark, head of Clean Power 2030 at DESNZ, said bids for fixed-bottom projects were expected to exceed the set limit, but the government now has the flexibility to increase the budget if doing so offers value for money. “For the first time, we will be able to ‘see’ the bid stack (but not the bidders) beyond the agreed budget and make informed decisions to contract for more offshore wind capacity at a price that offers real value to consumers,” Stark said. Adam Berman, Energy UK’s director of policy and advocacy, described the AR7 budget as a “step in the right direction” for building a secure, renewables-led energy system. “It’s right that the government is focused on procuring renewables projects that represent best value for money,” Berman said. “This is only the start of the auction process, and expanding the budget remains a possibility if it can represent strong value to consumers and the broader economy.” Industry representatives said that a clear, ambitious offshore wind pipeline remains critical to attracting large-scale private investment and supporting the UK’s goal of reaching net-zero emissions.

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