TL;DR
The UK awarded a record 8.4 GW of offshore wind in Allocation Round 7, with average strike prices around £90/MWh — substantially undercutting estimated costs for new gas and nuclear. The round included both bottom‑fixed and floating projects, drew strong competition and is expected to attract large private investment and jobs.
What happened
In Allocation Round 7 (AR7), the UK granted contracts for a record 8.4 gigawatts of offshore wind capacity — comprising about 8.2 GW of bottom‑fixed turbines and roughly 192 MW of floating wind. The auction was highly competitive: 19 projects with a combined potential of 24 GW were eligible to bid. Average strike prices landed at £91.20 per megawatt-hour in England and Wales and £89.49/MWh in Scotland, figures the government contrasted with higher estimated costs for new gas and nuclear generation. The awards were split across six bottom‑fixed projects and two floating projects; German company RWE won the largest share, securing nearly 7 GW of capacity. Officials said the round should unlock around £22 billion of private investment and support roughly 7,000 jobs, and estimated consumer savings of about £1.7 billion per year compared with relying on gas-fired power.
Why it matters
- Cost: AR7 strike prices are materially lower than estimated new-build costs for gas and nuclear, changing the economics of new power generation.
- Consumer impact: The government estimates the new capacity will reduce annual consumer costs by about £1.7 billion versus gas.
- Industrial scale-up: Awards include floating wind capacity, advancing a technology needed for deeper waters where fixed foundations are impractical.
- Investment and jobs: The UK government projects roughly £22 billion in private investment and about 7,000 jobs tied to the round.
- Energy strategy: Strong auction results feed into government arguments about improving domestic energy security and reducing reliance on fossil-fuel markets.
Key facts
- Total capacity awarded in AR7: 8.4 GW (about 8.2 GW bottom‑fixed, ~192 MW floating).
- Average strike prices: £91.20/MWh in England and Wales; £89.49/MWh in Scotland.
- Estimated cost of new gas generation in the UK used for comparison: ~£147/MWh.
- Estimated cost of new nuclear generation in the UK used for comparison: ~£124/MWh.
- AR7 had a record 19 eligible projects with combined potential capacity of 24 GW.
- Contracts were awarded to six bottom‑fixed projects and two floating projects.
- RWE secured nearly 7 GW of the awarded capacity, the largest single share.
- Government estimate for unlocked private investment: about £22 billion; estimated jobs supported: roughly 7,000.
- Government estimate of consumer savings compared with gas-fired power: nearly £1.7 billion per year.
- The 8.4 GW capacity was described as enough clean power for the equivalent of nearly 10 million homes.
What to watch next
- Timelines for when the 8.4 GW of awarded capacity will enter commercial operation — not confirmed in the source.
- Progress on commercial‑scale deployment and cost reductions for floating wind beyond the 192 MW awarded in AR7 — not confirmed in the source.
- Delivery and construction progress of the projects won by RWE and other developers, and any impacts on grid integration and balancing — not confirmed in the source.
Quick glossary
- Strike price: A contracted price per unit of electricity (usually £/MWh) agreed between a generator and a buyer or support scheme, used to provide revenue certainty.
- Bottom‑fixed offshore wind: Offshore wind turbines mounted on fixed foundations driven into the seabed, suitable for shallower waters.
- Floating wind: Offshore wind turbines installed on floating platforms anchored to the seabed, enabling deployment in deeper waters.
- Allocation Round (AR): A competitive process used by a government to award contracts or rights for developing renewable energy projects in designated areas.
- Megawatt‑hour (MWh): A unit of energy equal to one megawatt of power produced or consumed for one hour.
Reader FAQ
How much capacity was awarded in AR7?
The auction awarded 8.4 GW in total: about 8.2 GW bottom‑fixed and roughly 192 MW floating.
How do the auction prices compare with gas and nuclear?
Average strike prices were around £90/MWh, versus estimated new‑build costs cited in the source of ~£147/MWh for gas and ~£124/MWh for nuclear.
Who won the largest share of the auction?
German energy company RWE secured nearly 7 GW of the awarded capacity.
Will AR7 reduce consumer energy bills and by how much?
The source reports an estimated annual consumer saving of nearly £1.7 billion compared with relying on gas‑fired power.
When will the projects be operational?
not confirmed in the source
Tesla releases rare look at its lithium refinery, confirms production start Fred Lambert Jan 15 2026 GREEN ENERGY ELECTREK GREEN ENERGY BRIEF EGEB OFFSHORE WIND POWER UK UK offshore wind…
Sources
- UK offshore wind prices come in 40% cheaper than gas in record auction
- Record breaking auction for offshore wind secured to take …
- UK awards 8.4 GW in Europe's largest offshore wind …
- Q&A: What UK's record auction for offshore wind means …
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