Summary
Figure 1 Summary of Allocation Round (AR) 7 results for Offshore Wind (OSW), including Strike Price and Awarded Capacity. Sources: ORE Catapult analysis, drawing on LCCC, and UK DESNZ.
Offshore renewable energy developments in the UK made fantastic progress today, as the Allocation Round 7 (AR7) results show that a total of 8.25 GW capacity was successfully awarded across fixed-bottom offshore wind (OSW), and 192.5 MW capacity for floating offshore wind (FOW) projects. This welcome news came just after stating the budget for fixed bottom offshore wind would be increased to just under £1.8 billion. Results for other offshore renewables such as tidal stream and wave energy will be published in early February, as part of the AR7a results.
The initial budget and reference prices published prior to AR7 suggested a more measured approach to offshore wind deployment in the UK, but the anticipation was that a tight budget could increase competition, and keep the CfD clearing price low despite rising costs in the offshore wind supply chain. By almost doubling the pot for OSW, a bumper set of CfD awards have meant that not only were strike prices kept at a reasonable rate, but numerous offshore wind farms will receive revenue support. Here are the key outcomes of AR7 in the numbers:
- Total budget for fixed bottom OSW increased from £900 million to £1,790 million.
- Total capacity for fixed-bottom OSW of 8.25 GW was awarded CfDs to six projects. The OSW strike price of £91.20/MWh (2024 terms) is 19.3% lower than the published administrative strike price.
- A total capacity of 192.5 MW was awarded to two different projects for FOW, at a strike price of £216.49/MWh (2024 terms). This is 20.1% lower than the published administrative strike price for FOW.
- 8.44 GW awarded capacity for all OSW adds to the UK’s clean power target with projections of a total 32.2 GW forecast to be fully commissioned by 2030.
With the capacity awarded in AR7 for OSW and FOW, it looks like the contribution of offshore wind to Clean Power 2030 (CP2030) will be in the region of 32 GW. The steady progress in offshore wind deployment from now until 2030 (Figure 2) heralds the commitment and drive from the UK Government that offshore wind is truly part of our industrial and energy future.
Figure 2. Total OSW and FOW capacity by commissioning year, including new projects awarded CfDs in AR7
The bumper award of 8.44 GW is an excellent indicator for the supply chain. With a strong pipeline of projects gaining revenue support in AR7, companies have a clear view of the market in the UK based now on project commitment. The realistic strike prices gained by the fixed bottom projects also signal that projects will continue to completion, and we are less likely to see cancellations like Hornsea 4 in 2025.
It is important, however, to mention that even with this successful offshore wind allocation round, achieving the CP2030 target remains a significant challenge. The current state of grid infrastructure and system balancing constraints puts the integration of offshore wind at risk, raising concerns that large-scale deployment could lead to curtailment until the grid catches up. Current installation and commissioning timelines for offshore wind extend through 2031 with the new AR7 awards. It is essential that this exciting boost to offshore wind support be matched by the required grid upgrades we need to see.
Overall, there’s clear positivity at the results from AR7, with a sigh of relief too that a repeat of AR5 has been avoided, when no offshore wind projects participated in the auction due to administrative strike prices not reflecting current market conditions. Quite the opposite, with the largest allocation round award capacity yet, and a signal that the UK is all-in on offshore wind. Far from seeing stagnation in this sector, we are starting, once again, to accelerate.
AR7 Results
Fixed Bottom OSW:
The results of AR7 for fixed bottom OSW see successful bids from Awel y Môr, Norfolk Vanguard (East and West), Dogger Bank South (East and West), and Berwick Bank, with most projects achieving a strike price of £91.20/MWh (2024 prices). These projects are set to deliver a total capacity of 8.44 GW (Table 1) up to 2031. Dogger Bank South (East and West) are the first projects to have benefited from the relaxation of consenting requirements for AR7. Despite expecting a consenting decision by April 2026, these projects were awarded CfDs for a total capacity of 3 GW.
RWE is the biggest winner in this auction round, as majority owners of all successful fixed-bottom projects apart from Berwick Bank. The results were also followed by the news that RWE sold half of its stake in the Norfolk projects to KKR & Co. Co-owners of Dogger Bank South Masdar share in the success, while SSE, owner of Berwick Bank, gets its mammoth project off the ground with its first phase securing a CfD.
The first phase of Berwick Bank, 1.4 GW of its total 4.1 GW, receives a slightly lower strike price than the other projects, at £89.49/MWh. Due to the high transmission costs levied on projects in Scotland, Scottish projects were being treated as distinct technologies as those from the rest of the UK in AR7. The stack of projects in the auction was set as per the usual process, from lowest to highest bid for all projects across the UK. However, Scottish projects were to be given a clearing price of the highest bidding successful Scottish project, while other projects were given the clearing price of the other (non-Scottish) highest bidding successful projects. This was done to stop Scottish projects from setting CfD prices for non-Scottish projects that were higher than warranted, but resulted in a slightly lower price for the only successful Scottish project.
Table 1 Comparison of estimated eligible capacity vs awarded capacity for fixed bottom OSW from AR7. Source: TGS 4C Offshore and DESNZ
| Wind Farm Name | Owner(s) | AR7 Eligible Capacity (MW) | AR7 Awarded Capacity (MW) |
| ForthWind Demonstration Project | 20 | ||
| Rampion 2 | 400 | ||
| Sheringham Shoal Extension | 414 | ||
| Seagreen 1A | 500 | ||
| North Falls | 504 | ||
| Dudgeon Extension | 540 | ||
| Awel y Môr | RWE (60%), Stadtwerke München (30%), Siemens Energy (10%) | 775 | 775 |
| East Anglia Hub – ONE North | 900 | ||
| Five Estuaries | 1,100 | ||
| Norfolk Vanguard East | RWE (50%), KKR (50%) | 1,545 | 1,545 |
| Norfolk Vanguard West | RWE (50%), KKR (50%) | 1,380 | 1,545 |
| Norfolk Boreas | 1,380 | ||
| Mona | 1,500 | ||
| Outer Dowsing | 1,500 | ||
| Dogger Bank South (DBS West) | RWE (51%), Masdar (49%) | 1,500 | 1,500 |
| Dogger Bank South (DBS East) | RWE (51%), Masdar (49%) | 1,500 | 1,500 |
| West of Orkney | 2,000 | ||
| Berwick Bank | SSE | 4,100 | 1,380 |
| TOTAL | 8,245 |
Floating Wind:
Floating wind had its own pot this allocation round, indicating that the Government was eager to establish the UK as a true front-runner in this technology and capture the industrial opportunity of FOW. The results show that two projects were successfully awarded CfDs, at a strike price of £216.49/MWh (2024 prices) (Table 2). This is approximately 10% higher than the £194.92/MWh awarded to Green Volt in AR6, but this emphasises the low bid from Green Volt and the expected economies of scale for that commercial sized (560MW) project.
The winners of the floating round pot are the Pentland demonstrator, at 92.5 MW, and Erebus, at 100 MW. Pentland has majority ownership from CIP, but is part owned by recently founded GB Energy, giving the UK some direct ownership in this auction round. It is also co-owned with the National Wealth Fund, the Scottish National Investment Bank, and Hexicon. TotalEnergies and SimplyBlue also gain a joint CfD for the Erebus project.
Table 2 Comparison of eligible capacity Vs awarded capacity for FOW from AR7 results. TGS 4C Offshore and DESNZ
| Wind Farm Name | Owner(s) | AR7 Eligible Capacity (MW) | AR7 Awarded Capacity (MW) |
| Pentland Floating Offshore Wind Demonstrator | CIP (50.5%), Great British Energy (15%), National Wealth Fund (15%), Scottish National Investment Bank (15%), Hexicon (5.5%) | 92.5 | 92.5 |
| Blyth Offshore Demonstrator – phase 2 | 58 | ||
| Erebus | TotalEnergies (80%), Simply Blue Group (20%) | 100 | 100 |
| White Cross | 100 | ||
| Salamander | 100 | ||
| TOTAL | 192.5 |
What do the outcomes mean for offshore wind deployment?
The results from AR7 tell a number of stories, but all point to the Government’s commitment to a clean energy system for the UK.
The realistic strike prices that have cleared in the AR7 auction not only reflect current market conditions, but mean that projects that have been awarded CfDs have much higher project viability. Previous allocation round budgets and administrative strike prices were focused on driving down cost, at the potential expense of project bankability. The clearing price of £91.20/MWh in AR7 is a realistic value, and projects will attract and retain more investment as a result. These clearing prices should also be welcome news to UK consumers, as recent analysis from Baringa and Aurora energy consultants suggest that strike prices below £94/MWh for CfDs in AR7 would save the public money[1].
The result of 192.5 MW for FOW is also highly encouraging, and one of the most optimal outcomes for the floating wind industry. The Pentland project (92.5 MW) will provide a welcome testbed for appropriate technologies in the North Sea, whereas the Erebus project will have a similar size venture (100 MW) in the Celtic Sea. These two projects will hopefully be a launch pad for confidence building in FOW, and solidify the UK as a leader in the sector.
With regard to Clean Power 2030, up until AR7 the contribution of offshore wind appeared to be falling behind. The journey from CfD award to full commissioning typically spans many years, and the lack of awards in AR5, and a conservative 3.36 GW awarded in AR6, was putting pressure on the CP2030 targets. For example, Beatrice, awarded in AR1 (2014), reached full commissioning in 2019, a five-year process. Today’s larger projects, such as Dogger Bank (A, B and C) and Sofia (each over 1.2 GW), are targeting six to seven years from FID to completion. This meant AR7 was the last chance to add to the offshore wind capacity we can realistically expect by 2030.
With the AR7 awards, fully commissioned offshore wind by the end of 2030 is projected at approximately 32.2 GW, representing 75% of the original 43 GW target. If we take the liberty of setting a revised target of getting 50 GW of projects to FID by the end of 2030, then the future allocation rounds AR8, AR9 and AR10 would need to deliver around 4.5 GW each – a much more manageable target (Figure 3).
In order to boost the 32.2 GW of offshore capacity in 2030, efforts could be made to decrease deployment timelines, and accelerate OSW installation, so that AR8 projects have a chance of contributing to the OSW commissioned capacity by 2030. This, however, will require innovation and coordination to improve installation processes, reduce bottlenecks in supply chain, and scale up vessels to cope with demand.
Another clear message from the AR7 results is for the supply chain, and the confidence these results bring to those innovating and investing in the UK’s industrial growth. The 8.44 GW of capacity with secured CfDs are a signal that the market is growing, and that this opportunity for offshore wind to the UK economy in terms of jobs and adjacent industries is here to stay.
Figure 3. Total capacity of projects awarded CfDs by year, including projections of fully commissioned projects calculated by likely project delivery year. Fully commissioned total includes all offshore wind commissioned to date.
As a caution to the targets of Clean Power 2030, the number of turbines in the water is only one piece of the puzzle. Grid upgrades, critical for integrating renewables at scale, remain outside the OSW industry’s direct control, and are a bottleneck to delivering power from OSW regardless of commissioned capacity. While accelerating these upgrades is important to ensure new wind farms contribute fully to the UK energy mix, pushing harder could clash with public opinion given the high costs involved.
Ultimately, the capacity awarded in AR7 demonstrates that the UK Government is committed to offshore wind as a strategic component of the UK’s energy mix. A strong pipeline not only boosts the contribution of offshore wind to Clean Power 2030 targets, but signals to UK industrieshat there is a huge opportunity for our economy.
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[1] https://www.baringa.com/en/insights/low-carbon-futures/benefits-offshore-wind-uk/