AR7 offshore wind budget unveiled

The UK government sets an overall £1.08bn budget for offshore wind technologies in the next Contracts for Difference auction.

For Allocation Round 7 (AR7), £900m has been made available to fixed-bottom projects in Pot 3 with a further £180m for floating wind projects competing in Pot 4.

Chris Stark, head of the UK’s Clean Power Mission, stressed that it was “very likely” that bids will exceed the budget for fixed-bottom offshore wind, enabling the Government to take advantage of a new ability to go beyond the initial budget and contract more offshore wind generation if it sees value for money for the consumer.

The latest round will also see changes including the offering of 20-year contracts, rather than 15 years.

“With good competition in the auction, we hope it will reveal lower strike prices over a period that more accurately matches the operating life of projects,” he said.

However, industry voices are urging the the UK government to reconsider, with RenewableUK warning that the new budgets “will not maximise investment” and may only support around a quarter of the 20GW of eligible capacity looking to bid in AR7.

James Clark, Business Development Manager at SmartestEnergy said: "The shift to 20-year contracts is a positive move that supports lower financing risk, but ensuring the budget matches the scale of projects ready to go will be key to sustaining momentum and investor confidence. With ambitious net zero targets ahead, industry needs reassurance that the UK government remains fully committed to delivery."

The window for sealed bids opens on 11 November and the details on the budget and bidding window for other technologies running under the separate AR7a stream are still to be confirmed.