Experts warn that the latest Contracts for Difference (CfD) auction has left a 28GW shortfall in offshore wind projects, putting the UK’s 2030 targets at risk.
The AR6 auction secured 3.4GW of new offshore wind capacity, with an additional 1.5GW from existing projects, falling short of the 55GW goal for 2030.
Sam Hollister, Head of Economics, Policy and Investment at LCP Delta, highlighted that to address this shortfall, the government will need to secure around 28GW more in the upcoming AR7 and AR8 auctions.
Mr Hollister noted that the AR7 auction budget may need to be increased to over £2.5 billion to achieve the required 14GW.
Sam Hollister said: “This year’s CfD auction might have helped to turn the ship around after last year’s disappointment, but this is by no means a renewable energy drive that is going full steam ahead.
“Offshore wind is set to be the heavy lifter for renewable generation, but this year’s auction only delivered 3.4GW of new offshore wind projects, with a further 1.5GW of existing projects already in the pipeline securing new contracts.
“This is well below the levels that were needed in this auction for the UK to reach its target of 55GW of offshore wind by 2030.
“Based on current timelines to bring projects on stream, next year’s AR7 and the following AR8 auction would each need to procure around 14GW of offshore wind (28GW in total).
“We are yet to see how impactful the recent partnership announcement with The Crown Estate will be on cutting the planning process for projects, which could give the government an additional CfD auction to meet its target.”
