UK Awards 8.4 GW to Power 10M Homes in Europe's Biggest Offshore Wind Auction

In a historic milestone for renewable energy in that country, the United Kingdom has awarded 8.4 GW of capacity in its latest offshore wind auction, marking the largest such procurement ever held in Europe.

The auction successfully secured 8.2 GW of bottom-fixed offshore wind and nearly 200 MW of floating offshore wind projects. Once operational, the awarded capacity is expected to generate enough electricity to power the equivalent of almost 10 million homes.

Competitive Pricing and Consumer Savings

The auction saw intense competition, with 19 eligible projects totalling 24 GW of potential capacity vying for contracts. This drove strike prices to competitive levels, that is £91.20/MWh for projects in England and Wales, and £89.49/MWh in Scotland.

According to data from WindEurope, these prices underscore offshore wind’s position as a high-value alternative to traditional energy sources. The AR7 strike prices are approximately 40% lower than the cost of new gas plants (£147/MWh) and nearly 30% lower than new nuclear power (£124/MWh) in the UK. The shift toward this wind capacity is estimated to save nearly £1.7 billion annually compared to the cost of gas.

Overcoming Past Uncertainty

AR7 follows a period of instability for the UK wind market. After a failed auction in 2023 (AR5) and a subsequent round (AR6) that failed to bring forward sufficient capacity, AR7 has been hailed as a recovery.

The UK Government increased the auction budget to £1.79 billion, up from an initial £1.1 billion, to secure extra capacity and enhance national energy security. Industry experts credit the UK’s ‘two-sided’ Contracts for Difference (CfD) design for de-risking these massive projects and providing long-term revenue visibility.

Key Winning Projects

The auction awarded contracts to six offshore wind projects and two floating wind projects:

• Dogger Bank South: The largest winner at 3,000 MW (RWE/Masdar).

• Norfolk Vanguard (East & West): Combined 3,090 MW (RWE).

• Berwick Bank: 1,380 MW (SSE Renewables).

• Awel y Mor: 775 MW (RWE/Stadwerke Munchen/Siemens).

• Floating Wind: The Pentland (92.5 MW) and Erebus (100 MW) projects mark a step toward commercial-scale floating technology, though they required higher strike prices of £216.49/MWh.

A Model for Europe

WindEurope has called on other European governments to follow the UK’s lead by coordinating annual build-outs and utilising de-risking mechanisms like CfDs. The industry is currently advocating for a New Offshore Wind Deal to target 15 GW of annual deployment across Europe from 2031 to 2040.

The success of AR7 is expected to be a central topic at the upcoming North Seas Summit in Hamburg, where government and industry leaders will seek to cement future commitments to offshore energy.