U.K. Completes World's Largest Offshore Wind Auction

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

A record-breaking 8.4 gigawatts (GW) of new offshore wind capacity was secured in the latest auction completed by the U.K. government.

Wind Auction Success

The U.K. has completed Europe's largest ever wind auction, awarding contracts for 8.4 gigawatts (GW) of new capacity that will be capable of powering more than 12 million homes.

The seventh auction - Auction Round 7 (AR7) - has been a resounding success for the Labour-led government and the wind sector, especially when compared to AR5 in 2023, which failed to attract a single bid. For additional information, see September 26, 2023, article - U.K. Fails to Attract Any Offshore Wind Bidders. The government claimed that the auction results will unlock £22 billion (US$29.5 billion) in private investment and support 7,000 skilled jobs across the country. Energy Secretary Ed Miliband said: "With these results, Britain is taking back control of our energy sovereignty. This is 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. Clean, homegrown, power is the right choice for this country to bring down bills for good, and this auction will create thousands of jobs throughout Britain." Industrial Info is tracking 95 active offshore wind projects in the U.K. worth almost US$230 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for the reports.

How it Works

The auction uses a Contracts for Difference (CfD) system to incentivise investment in large-scale projects with high upfront development costs. It does this by agreeing a 'strike price' per megawatt of electricity generated for a 15-year period, protecting developers from any volatility in wholesale electricity prices during that period. For this auction, the average price per project agreed was £91 (US$122) per MW, which the government stated was 40% cheaper than building equivalent gas-fired power plants, which came in at £147 (US$197) per MW. 

The Biggest Winners

The 12 projects are located in waters across England, Scotland and Wales, with RWE Renewables GmbH (Essen, Germany) walking away as the biggest winner with 6.9 GW of projects. The company had five winning projects including two new phases of the existing Dogger Bank offshore wind development rated at 1.5 GW each, the Norfolk Vanguard East and West windfarms rated at 1.4 GW each and the Welsh offshore windfarm, Awel y Môr, rated at 775 MW and the first Welsh project to win a contract in more than a decade. Berwick Bank Phase B in the North Sea, rated at 1.4 GW, was also successful and is being developed by SSE Renewables (Perth, Scotland). The full 4.1 GW Berwick Bank project is the largest proposed windfarm in the world and will boast up to 307 turbines with a capacity of more than 13 megawatts (MW) each. It has an estimated cost of more than US$16 billion. 

Will Wind Energy Targets be Met?

The U.K. government has a stated goal of having at least 43 GW of offshore wind by 2030 in an effort to meet its clean power targets. That is an ambitious goal considering its current offshore wind capacity stands at 16.6 GW, with a further 11.7 GW under construction. The key obstacle for many in the industry are the delays in getting those projects connected to the grid.  Sheena McGuinness, Co-Head of Energy and Natural Resources, at financial services firm RSM U.K. welcomed the success of the auction but pointed to the country's creaking electricity grid. "Giving the green light to more renewable projects adds more pressure on the U.K.'s creaking grid network. The nature of offshore wind presents a geographical challenge as energy is generated in remote areas and needs an efficient grid network to ensure the power can reach demand. In the first half of last year, only 63% of potential offshore wind generated energy reached the grid, resulting in £116 million (US$155.5 million) curtailment payments and representing more than 4 terawatt-hours (TWh) of unusable wind power. In addition, new schemes face grid connection delays. We currently have 700 GW of renewable capacity, which exceeds current electricity demand, queuing for connection."

Positive Industry Reaction

Leading industry association RenewableUK welcomed the news. "This is a great result for Britain's energy security and for hard-pressed billpayers, because these new offshore wind farms will generate the power we need at a lower cost than new gas or nuclear plants, and at a stable and predictable price," said Ana Musat, executive director of policy at RenewableUK. "The U.K. has made the right decision to roll out renewables at speed and at scale, giving our country greater energy security and protecting consumers against volatile global gas prices which caused the last energy crisis. Homegrown power is the best defence against geopolitical volatility, and this auction is a significant step forward towards energy independence."

A Big Win for Wind in Uncertain Times

The result is a badly needed win for the European wind sector, which has seen a number of auctions fail over the past the year, coming under fire from many industry groups and developers. In December, Industrial Info reported that auctions in Germany and the Netherlands failed to attract any bidders while the U.K.'s funding for its next auction had been branded as too low for the country to hit its offshore targets. For additional information, see December 02, 2025, article--Europe's Offshore Wind Auctions Come Under Fire.

Key Takeaways

• 8.4 gigawatts (GW) of new offshore wind capacity was successful in the latest U.K. auction.
• Industrial Info is tracking 95 active U.K. offshore wind projects worth almost US$230 billion in investment.
• The U.K. wants to get from 16.6 GW of offshore wind capacity today to 43 GW in the next five years.

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).