Skip to main contentThe UK offshore wind Contracts for Difference AR7 allocation was announced yesterday, 14th January, by the Department for Energy Security and Net Zero (DESNZ), securing a record 8.4GW of offshore wind capacity to support new renewable projects across the UK.
The 8.4GW will support twelve new projects located off the coast of the UK, following ministers’ increase in the amount of funding available to developers. The amount of capacity secured from the projects is an all-time high, including the largest planned offshore wind project in the world, the Berwick Bank offshore wind farm in the North Sea. It will also see the first Welsh project to win a contract in more than a decade at Awel Y Mor in the Irish Sea.
Other projects include Dogger Bank South, off the coast of Yorkshire, and Norfolk Vanguard, off the East Anglian coast, as well as funding for two projects designed to promote floating offshore wind technologies at Erebus, off the Pembrokeshire coast in the Celtic Sea, and Pentland, off the coast of Dounreay in Scotland.
The UK offshore wind Contracts for Difference AR7 allocation marks the largest offshore wind auction result in British history.
The statement from DESNZ said the new projects would be able to generate enough electricity to power 12 million homes whilst delivering £22 billion in private investment and supporting 7,000 jobs during construction.
The average strike price for the projects was £91/MWh, which, whilst higher than current wholesale electricity prices, is calculated to be 40% lower than the Levelised Cost of Energy (LCOE) of building and operating a new gas-fired power station at £147/MWh. Contract lengths in AR7 were also extended from 15 years to 20 years in order to make it more attractive to bidders.
In a statement, Energy Secretary Ed Miliband said, “We’ve secured a record-breaking 8.4GW of offshore wind, enough to power the equivalent of over 12m homes. This is the largest amount of offshore wind procured in any auction ever in Britain or indeed Europe. With these results, we are taking back control of our energy sovereignty. It’s a historic win for those who want Britain to stand on our own two feet, controlling our own energy rather than depending on markets controlled by petrostates and dictators. It is a significant step towards clean power by 2030. Clean, homegrown power is the right choice to bring down bills for good, and this auction will create thousands of jobs throughout Britain.”
The UK currently has nearly 17GW of operational offshore wind capacity, with a further 12GW under construction. It has been estimated that in order to meet the government’s target of a carbon-neutral power grid by 2030 it would require at least 43GW of operational offshore wind, meaning at least another 14GW has to come online by 2030 to hit this target.
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