The UK has secured a record amount of new offshore wind capacity in the latest Government-backed auction for vital new clean power projects (Allocation Round 7). These new offshore wind farms will strengthen Britain’s energy security and reduce electricity bills.
The 8.4 gigawatts (GW) announced in today’s results beat the previous record of 7GW set in the 2022 auction. The number of successful new offshore wind farm projects has also hit a record high at eight, surpassing the previous record of six in the 2019 auction.
These projects are located right across the UK and will provide new generation near big demand centres in the south east of England, as well as bringing economic benefits and investment in energy infrastructure to Scotland and Wales. These new projects are vital as many of the UK’s old gas and nuclear plant are set to retire in the 2030s, and the country’s electricity demand is expected to surge in the years ahead.
Six fixed-foundation offshore wind farms (8.245GW) and two floating projects (192.5MW) won Contracts for Difference (CfDs) in this Allocation Round. In total, these new projects will power more than 9.7 million homes and attract over £22 billion in new private investment in the UK’s economy. They will support the creation of 7,000 jobs, especially in coastal communities which need new economic opportunities.
Fixed-foundation projects secured strike prices of £91.20/MWh in England and Wales, and £89.49/MWh in Scotland. Independent analysis by Aurora Energy Research and Baringashows that offshore wind farms generating at a strike price below £94/MWh are saving billpayers money, and we are delighted to see all new generators awarded contracts today below this price. Offshore wind is highly cost competitive with new generation from gas (£147/MWh according to government data) and new nuclear power (£124/MWh).
These projects will also enable the UK to avoid burning more than 12 million tonnes of CO2 to generate electricity from gas, the bulk of which would have been imported at a cost we cannot control. The power generated by these new offshore wind farms will save billpayers nearly £1.7 billion a year compared to the alternative cost of gas.
RenewableUK’s Executive Director of Policy Ana Musat said, “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.
“The UK 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.
“Investment in renewables is also crucial to keep pace with the UK’s need for more energy. Electricity demand is set to increase significantly in the years ahead as existing nuclear and gas capacity retires, so the 8.4 GW awarded contracts today will be crucial for economic growth.
“Growing the offshore wind sector’s supply chain is a critical part of the Government’s Industrial Strategy, and rightly so. Our analysis shows that maximising investment in high-value parts of the UK’s offshore wind supply chain could deliver an extra £25 billion to our economy over the next decade, building on the 150 factories and hundreds of businesses we have around the country which are already benefitting from contracts to build and manage our world-class offshore wind farms”.
