The UK government’s recent allocation of £1.08 billion for offshore wind projects in the AR7 Contracts for Difference auction has sparked a debate within the industry. While some see it as a step in the right direction, others argue it falls short of what’s needed to maximize investment and secure the UK’s energy future.
RenewableUK, the trade association, has urged the government to reconsider the budget, stating that the current figure “will not maximise investment” into new projects. They estimate that the budget will cover only about a quarter of the 20GW of eligible capacity for this year’s tender. Ana Musat, RenewableUK’s executive director of policy and engagement, highlighted the potential for competitively-priced bids and the need to adjust the budget to maximize procurement. She emphasized that early investment in floating wind technology is crucial for building supply chains and reducing costs.
Musat also pointed out the economic benefits, stating that every gigawatt of new offshore wind capacity boosts the economy by £2-3bn. With the right support, the number of offshore wind jobs could more than double from 40,000 to 95,000 by 2030, strengthening energy security and reducing exposure to volatile gas prices.
Scottish Renewables chief executive Claire Mack echoed these sentiments, urging the government to carefully consider the budget to reassure investors of its commitment to wind farms off Scotland. She warned that an auction that fails to deliver for Scotland could undermine the growth essential for energy security.
The UK government’s head of Clean Power 2030, Chris Stark, acknowledged that bids for fixed-bottom wind farms will likely exceed the budget limit. He noted the government’s new ability to adjust the budget later in the process if it sees value for money.
Energy UK’s director of policy and advocacy, Adam Berman, described the AR7 budget as a “step in the right direction.” He emphasized the importance of procuring renewables projects that represent the best value for money and the possibility of expanding the budget if it can represent strong value to consumers and the broader economy.
This debate highlights the delicate balance between fiscal responsibility and ambitious investment in renewable energy. The outcome of the AR7 auction could shape the trajectory of the UK’s offshore wind sector, influencing private investment, job creation, and the country’s energy security. As the auction process unfolds, the government’s decisions will be closely watched by industry stakeholders and investors alike.