Last week, the results for AR6 of the CfD auctions were announced, with a total of 9.6GW of renewable energy capacity securing contracts. A record-breaking 3.28GW of capacity was awarded to solar PV. Two new offshore wind projects won contracts, totalling 3.3GW, along with 400MW for Green Volt floating offshore wind. This marks a positive shift after the lack of offshore wind bids in AR5.
The resurgence in offshore wind participation was driven by a series of budget increases, rising from approximately £200 million in AR5 to ~£1 billion, and then further boosted to £1.56 billion by the new Labour government.
Around 1.5GW of offshore wind capacity cleared through the Permitted Reductions rule, which allows developers to withdraw up to 25% of capacity from previous CfD contracts and re-enter AR6 to seek higher strike prices.
The new offshore wind capacity in AR6 remains below the 5.4GW and 7.0GW cleared in AR3 and AR4, respectively. This highlights the need for greater participation in AR7 to ensure the UK meets its target of 50GW of offshore wind by 2030.