‘Historic win’: UK to procure record-breaking 8.4GW offshore wind capacity

The UK has released results for the seventh iteration of its Contracts for Differences (CfD) auctions. The latest round secured 8.4GW of offshore wind capacity – the largest procurement of its kind in British history.

CfD auctions involve renewable energy operators who bid for contracts with the government-owned Low Carbon Contracts Company. These contracts are designed to protect developers from wholesale price volatility and protect consumers from price rises.

Ed Miliband, the UK’s energy secretary, commended the auction results, framing them as part of the country’s push to reduce fossil fuel dependence.

“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.”, he commented.

Miliband also stressed the prices secured in the latest round, which he says, are 40% lower than the cost of building a gas project.

The latest figures for cost competitiveness (levelised cost of electricity) also tilt in the favour of offshore wind. Gas power production costs are estimated to be £147 per MW, compared to £91 on average for offshore wind.

The list of winning projects includes two of the country’s largest offshore wind farms – DBS Wind Farm and Norfolk Vanguard, both located off the northeast coast of the UK.

Other winners include Berwick Bank (a Scottish project in the North Sea) and Awel Y Môr – one of the first Welsh winners of a CfD contract.

These projects are expected to unlock £22bn in private investment. Amongst the corporate financiers who will deliver the capital, is listed renewables operator RWE – which owns stakes in five winning projects.

RWE is partnering with private equity firm KKR to deliver two of its wind farms – Norfolk Vanguard East and West.

“We are delighted to have been successful in securing long-term offtake contracts for five projects in AR7”, said Markus Kebber, RWE’s chief executive. “. By combining KKR’s investment know-how in large-scale, complex infrastructure projects with RWE’s extensive offshore wind expertise, we are well positioned to jointly realise these major projects”, he added.

The procurement of large-scale offshore wind moves the government closer to its Clean Power 2030 target – under which Britain expects to produce enough clean energy to meet its all of its consumption needs.

“This is a stonking result for delivering on our mission for clean power by 2030”, commented CP30 head of mission control Chris Stark.

Recently, the offshore wind industry has faced gusty political headwinds – particularly from Washington DC. Last week, Equinor and Orsted announced legal action against the Trump administration’s attempts to suspend their offshore wind projects.

“Amid global headwinds and pressures facing the offshore wind sector in recent years, we’ve secured a record amount of capacity at a competitive price for the consumer”, Stark notes.