A record 8.4GW of new offshore wind licences from the UK government has resulted in Europe’s biggest ever offshore wind auction, offering enough capacity to power the equivalent of over 12 million homes.

As Britain plans to cut bills and meet growing energy demand, the strike price for offshore wind has been agreed at 40% lower than the cost of building and operating a new gas power plant and puts the country firmly on track to deliver the mission for clean power by 2030.

The Contracts for Difference Auction Round 7 announcement unlocks £22 billion in private investment and supports 7,000 skilled jobs in every corner of the country - from the Scottish Highlands to the Celtic Sea.

The big winners of the auction round are RWE who have been awarded Contracts for Difference at a strike price of £91.20 per megawatt hour for its Norfolk Vanguard East and Norfolk Vanguard West, its two Dogger Bank South and the Awel y Môr offshore wind development projects, with a combined capacity of 6.9 gigawatts. The German energy giant has also announced global investor KKR has acquired a 50% equity stake in each of the Norfolk Vanguard projects.

SSE secured a CfD for 1.4 GW of capacity from Phase B of its Berwick Bank (Berwick Bank B) at a guaranteed strike price of GBP 89.49/MWh (around EUR 103.25/MWh).

The winning floating wind projects include the 100 MW Erebus in the Celtic Sea and the 100 MW Pentland in Scotland, with a strike price of GBP 216.46/MWh (approximately EUR 250/MWh).

Blue Gem Wind, a joint venture between Simply Blue Group and TotalEnergies, is developing Erebus. The Pentland floating wind project, developed by Copenhagen Infrastructure Partners (CIP), recently secured investment from Great British Energy, National Wealth Fund and Scottish National Investment Bank.

Head of Mission Control, Chris Stark said:

“This is a stonking result for delivering on our mission for clean power by 2030. 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.

We need more offshore wind to meet the increasing demand for electricity in the years ahead, this result powers us towards a future of clean, secure, energy abundance and less reliance on foreign imports”.

Neil McDermott, CEO at the Low Carbon Contracts Company (LCCC), observed:

“The results from this allocation round are a prime example of the Contracts for Difference mechanism’s greatest strengths, providing certainty for investors and supporting British jobs across the country.

At LCCC, we’re proud of our role in managing these contracts, adding to our existing operational portfolio of more than 10 GW with an additional 25 GW in the pipeline, and providing stewardship of these projects for the next two decades”.

Markus Krebber, CEO of RWE AG noted: “We are delighted to have been successful in securing long-term offtake contracts for five projects in AR7. In addition, we are excited to join forces with KKR as our strategic partner in the Norfolk Vanguard East and Norfolk Vanguard West offshore wind projects. 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. With the Dogger Bank South projects and our renowned partner Masdar, we are experiencing firsthand the value of strong partnerships. And at Awel y Môr, we are proud to collaborate with Stadtwerke München and Siemens, who bring their expertise and commitment to our shared success. With the successful outcome of AR7, and the agreed partnership with KKR, RWE has reached key milestones in executing its UK offshore wind development pipeline.”

Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), said: “This is set to be a breakthrough moment in the UK’s energy independence and for stabilising household and industry’s energy bills. Wind lowered the wholesale power price by around a third last year by squeezing out gas generation, which has a direct benefit on electricity bills. At today's auction price, it is predicted to pay back a little via levies on bills too”.

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