Auction is a last major chance to unlock offshore wind scale needed to meet CP2030
To mark today's opening of Renewable UK's Global Offshore Wind Conference 2025 in London, I’ve written exclusively in the reNEWS Live@ official show daily on how this year's AR7 auction is pivotal to unlocking the scale of offshore wind investment needed to deliver the UK's clean energy ambition under CP2030.
As delegates gather again for this year’s conference, it does feel like we’re at another pivotal moment for the offshore wind industry, especially in the UK.
Nearly a year on from the UK General Election, we’ve seen the new government confirm its hugely ambitious Clean Power 2030 mission, and then back that up with positive policy and regulatory progress in several areas to remove barriers to delivery.
Still, the world around us is changing. And we can’t shy away from the turbulence our sector is facing from the new geopolitical and macro-economic realities.
How we navigate this new uncertain world, while delivering the core aims of Clean Power 2030 – lower bills, greater energy security and green jobs – is the exam question before us.
With the UK racing to deliver these Clean Power 2030 (CP2030) ambitions, Allocation Round 7 (AR7) of the Contracts for Difference (CfD) scheme stands as the next critical inflection point before us.
AR7 is not just another auction round. It is one of the last realistic opportunities for the UK to secure the scale of investment needed to meet its CP2030 targets and so deliver homegrown, affordable, clean energy to consumers.
Securing through AR7, and then delivering at pace, a volume of offshore wind we haven’t seen before in one allocation round, will be a core component of meeting CP2030.
As the UK’s clean energy champion, SSE very much welcomes the signal that Government Ministers have already given on their AR7 ambition. Replacing the traditional monetary budget with a “capacity ambition” in advance of the auction and giving the Secretary of State the flexibility to set the final budget to maximise the volume of offshore wind capacity contracted is welcome.
Equally, extending the CfD contract length from its current 15-year term to either 20 or 25 years would reduce strike prices and pressure on bills whilst further protecting consumers from volatile gas prices.
However, the spectre of zonal pricing looms large and would be hugely damaging to the investment required to deliver CP2030. Regardless of the potential protections offered to projects entering AR7, ruling out zonal pricing now will be vital in ensuring optimum AR7 success.
Zonal pricing would be particularly detrimental to Scottish projects. Our view is you can’t deliver UK offshore wind targets for 2030 without Scottish offshore wind.
There is an opportunity to safeguard delivery of Scottish offshore projects through AR7 by levelling the playing field, taking into consideration the volatile and unpredictable nature of transmission charges impacting Scottish projects.
Separately, there’s a balance to be struck between maximising the number of projects in the auction and ensuring they are mature enough to be confident in delivery. That’s why we have concerns over proposals to relax criteria to allow unconsented offshore wind projects to participate in the auction process.
Equally, by ensuring projects in the very latter stages of the consenting process, such as our Berwick Bank project, get a determination in time for the AR7 auction, we can deliver the scheme’s most ambitious and competitive auction to date, which Ministers rightly want to see.
It is a challenging time right now. But I remain positive, not least because of the ambition being shown by government and the positive momentum we have seen in a number of policy areas.
What we need now is to keep up that momentum and overcome those last few hard yards that will lead to real delivery. Getting AR7 right gives us the chance to show that CP2030 is deliverable and would provide the welcome boost to investor confidence that’s needed.