German developer RWE has secured the lion’s share of capacity in Allocation Round 7, the UK’s key offshore wind auction.
RWE has been awarded Contracts for Difference for 6.9GW of capacity from a total of 8.4GW that has come through the round.
The result comes after the UK government increased the original £900m budget to £1.8m after reviewing the bid stack. Bids totalling a budget value of £7.4bn were received in the round, according to the results publication.
RWE has landed a £91.20 per megawatt-hour (in 2024 prices) strike price for its 3GW Dogger Bank South complex and 3.1GW Norfolk Vanguard site, both off east England.
It has also bagged a CfD of 775MW for the Awel Y Mor offshore wind project in the Irish Sea.
SSE was the only other winner in the fixed-bottom category with a 1.4GW portion of the 4.1GW Berwick Bank scheme, which has secured a CfD at £89.49/MWh.
The delivery years are 2028-29 for Vanguard and 2030-31 for the rest of the fixed-bottom capacity.
Two floating projects have secured CfDs, Blue Gem Wind’s 100MW Erebus in the Celtic Sea and CIP’s 92.5MW Pentland off north Scotland.
Both have won CfDs worth £216.49/MWh.
The AR7 fixed-bottom offshore wind prices are calculated by DESNZ as £64.23-65.45/MWh in 2012 prices compared to £58.87/MWh for new capacity in AR6.
Orsted has already cancelled a deal from the latter for its 2.4GW Hornsea 4 citing market conditions.
DESNZ also pointed out the clearing prices in AR7 are around 20% below the bidding cap of £113/MWh for fixed-bottom wind.
Energy Secretary Ed Miliband said Britain is taking back control of its energy sovereignty with the results.
“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 said.
“It is a monumental step towards clean power by 2030 and the price secured in this auction is 40% lower than the alternative cost of building and operating a new gas plant.
“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.”
Head of Mission Control, Chris Stark added the outcome 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,” he said.
“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.”
FULL COVERAGE OF WEDNESDAY’S AR7 RESULT: