Wood Mackenzie has claimed that the UK’s Contracts for Difference (CfD) Allocation Round 7 could deliver stability and value to the offshore wind sector after recent setbacks in previous auctions, despite a lower than expected £900m budget.
The research firm said changes to AR7, including 20-year contracts and tighter competition, could deliver “a win-win-win for policymakers, developers and the supply chain.”
It expects around 5.5GW to be awarded under the auction, despite a 41% reduction in the annual budget, describing the round as a “more-for-less” recalibration designed to increase £-per-MW efficiency.
Research analyst Sasha Bond-Smith said: “AR7 extends CfDs to 20 years and sharpens competition so a smaller pot can buy more MW per pound. It is a deliberate reset designed to change the narrative from volatility to stability.”
Principal analyst Finlay Clark added that the conditional top-up mechanism “helps ensure full pot utilisation and avoids a repeat of AR6’s effective £895 million underspend,” allowing the government to adjust awards if bids represent good value.
Wood Mackenzie said the auction structure positions DESNZ to balance affordability, capacity, and supply-chain sustainability as the UK pursues long-term offshore wind growth.