The UK government’s initial £900m budget for its next offshore wind auction could restrict growth and undermine the country’s energy ambitions, according to WindEurope.
The Allocation Round 7 (AR7) budget sets a maximum of £900m for bottom-fixed offshore wind and £180m for floating projects, enough to secure only 5–6GW of capacity.
The UK currently has 16.6GW of offshore wind and aims to reach 50GW by 2030, leaving only this and one further auction to meet the target.
WindEurope warned that the proposed budget would prevent delivery of most of the 20GW of shovel-ready projects expected to bid in AR7, allowing only about a quarter to proceed.
The trade body said the shortfall would mean the UK missing out on an estimated £53bn in private investment and 45,000 jobs. Each gigawatt of offshore wind contributes around £2–3bn to the UK economy.
Giles Dickson (pictured), chief executive of WindEurope, said: “This budget risks severely restricting the growth of offshore wind in the UK. There are lots of good projects waiting to be built, and consumers and industry want the cheaper electricity that they’d bring. But with this initial budget proposal, only a quarter of the projects will get through.
“That would be a big missed opportunity for the UK. They’d miss out on millions in investment and thousands of jobs. It would undermine the UK’s leadership on offshore wind. And impact negatively on the whole of the UK and European wind supply chain.”
The government has set strike price caps of £113 per megawatt-hour for bottom-fixed and £271/MWh for floating wind, reflecting the higher cost of early-stage technologies.
WindEurope added that lower auction volumes could weaken investor confidence and destabilise the wider European supply chain, which depends heavily on UK market activity.
The sealed bidding window for AR7 will run from 11 to 17 November, with results due on 14 January.