UK awards 8.4 GW in Europe’s largest offshore wind auction

The United Kingdom’s latest offshore wind auction round (Allocation Round 7, or AR7) awarded a total of 8.4 GW of capacity, including 8.2 GW of fixed-bottom offshore wind and nearly 200 MW of floating offshore wind. This makes AR7 the largest offshore wind tender ever held in Europe in terms of awarded capacity.

A record 19 projects, representing a potential total capacity of 24 GW, were eligible to bid. This strong level of competition resulted in highly competitive strike prices for fixed-bottom projects: £91.20/MWh in England and Wales, and £89.49/MWh in Scotland.

The awarded capacity is expected to generate enough electricity to supply the equivalent of almost 10 million homes, significantly strengthening the UK’s power system while accelerating the deployment of renewable energy at scale.

The AR7 strike prices are around 40% lower than the estimated cost of building and operating new gas-fired power plants in the UK (approximately £147/MWh), and nearly 30% lower than the cost of new nuclear generation (around £124/MWh).

According to industry estimates, electricity produced by the 8.4 GW of newly awarded offshore wind projects will save UK consumers close to £1.7 billion per year compared with the alternative cost of gas-fired generation, while also reducing exposure to volatile fossil fuel prices.

A turning point after previous auction setbacks

The AR7 results mark a critical milestone for long-term planning and investment certainty in the UK offshore wind sector. In 2023, Allocation Round 5 (AR5) failed to award any offshore wind capacity, triggering uncertainty and project delays across the supply chain. The subsequent AR6 round delivered a more realistic strike price, but did not bring sufficient new capacity to meet the UK’s medium-term targets.

AR7 now represents a clear inflection point, combining strong competition with a robust pipeline of projects that are ready to move into construction.

This outcome is largely attributed to the UK’s auction design, which is based on bilateral Contracts for Difference (CfDs). These contracts reduce revenue risk for offshore wind projects by providing long-term price visibility, improving bankability and lowering the cost of capital.

With a total budget of £1.79 billion, the UK government exceeded its initial allocation of £1.1 billion, securing additional capacity to support energy security, economic resilience, and decarbonization goals.

Last year, the European wind industry proposed a “New Offshore Wind Deal” aimed at accelerating and de-risking the development of competitive, locally sourced offshore wind. The proposal calls on European governments to coordinate the deployment of 15 GW per year between 2031 and 2040, with 10 GW annually awarded through Contracts for Difference auctions.

In return, the industry committed to significant private investment and further cost reductions across the offshore wind value chain.

The upcoming North Seas Summit in Hamburg is seen as a key opportunity to align governments, industry players, and transmission system operators (TSOs) around these objectives, building on the momentum generated by the UK’s AR7 success.

AR7 awarded contracts to six fixed-bottom offshore wind projects and two floating offshore wind projects.

The 192 MW allocated to floating offshore wind represents another step toward the commercial-scale deployment of this emerging technology. To maintain momentum and unlock its full potential, the industry highlights the need for tailored support schemes, a clear timetable for dedicated floating wind auctions, and substantial investment in port and grid infrastructure.

Below is an overview of the winning AR7 projects: