28 July 2025
UK adjusts auction parameters for wind energy to reflect market realities
Wind farm in the North sea on the coast of United Kingdom.
The UK has increased the strike price caps for wind technologies for its upcoming AR7 Contracts for Difference (CfD) auction. This applies to fixed-bottom (£113/MWh) and floating offshore wind (£271/MWh) as well as to onshore and remote island wind (£92/MWh). The price base has been updated to 2024 prices.
“It’s good that the UK is adjusting its AR7 auction parameters to reflect current market conditions. Fit-for-purpose auction design that allows for viable projects is what gets wind farms built. And this is for the benefit of national and European energy security, employment and competitiveness”, says Viktoriya Kerelska, Director of Advocacy and Messaging at WindEurope.
In 2023 the UK experienced what can happen when auction design does not match market realities. Back then, not a single project developer bid in the AR5 auction round for offshore wind due to the very low strike prices allowed.
Under the new parameters laid out by the UK Government, the AR7 auction round is set to attract up to £53 billion in private investment to deliver vital new offshore wind projects. Next to adjusted strike prices and load factors, projects awarded in the AR7 auction round will receive their CfDs for 20 years, up from 15 years so far. And the UK will also set up a separate pot for floating wind to strengthen its position as the global leader in this technology.
For project developers and industry to understand the full implications of the adjusted auction parameters, the UK Government will now have to publish the AR7 budget as soon as possible. Only an ambitious budget proposal will ensure the UK can award the offshore wind capacity it needs.
The UK Government should further set out a long-term schedule of future auctions to help developers and infrastructure investors plan and allocate capital as efficiently as possible, and to increase the confidence of supply chain companies considering new investments in the UK. Other European countries like Germany and France offer much better visibility on future auction schedules.
Next step: The application window for the AR7 CfD round is scheduled to launch on 7 August.