UK Government Implements Reforms for Offshore Wind Allocation Round 7

The UK government has announced significant reforms to the Contract for Difference (CfD) Allocation Round 7 (AR7) in a move that will open up opportunities for 20GW of offshore wind projects to participate in the auction.

One of the key changes in the eligibility criteria for fixed-bottom offshore wind projects is the allowance for projects without full planning consent to apply, provided that they have reached a key planning milestone at least twelve months prior to the auction. This adjustment aims to ensure a continuous pipeline of projects entering the auction process.

Additionally, the government will eliminate the option of flexible bidding for fixed-bottom offshore wind projects based on improvements in budget setting and auction design.

Furthermore, the AR7 will now accommodate multiple floating wind projects to compete, with specific parameters and budget ring-fencing where necessary. The phasing approach will also be extended to floating projects, enabling the delivery of large floating wind farms in stages to mitigate construction risks.

Contracts for both fixed-bottom and floating wind projects have been extended from 15 to 20 years, providing greater long-term stability for developers and investors.

With these reforms, a staggering 20GW of offshore wind capacity is now eligible to bid in AR7, surpassing the country’s current offshore wind capacity of 16GW.

These changes align with the Clean Power 2030 Action Plan’s target of achieving between 43 and 51GW of offshore wind capacity. Offshore Energies UK has highlighted the need for an additional 8.4GW of new offshore wind capacity in AR7 to stay on track towards meeting these ambitious goals, making AR7 potentially the largest auction round in history.

The commencement date for Allocation Round 7 is set for August 7, with applications being accepted until August 27.