Recent Wind Energy Project Contract Awards

Remarkable outcome in the latest UK renewable energy auction #AR7: 8.4 GW awarded to new offshore wind. The blended average strike price for fixed-bottom offshore wind of £90.91/MWh is a decent result, only modestly above last round’s winning prices, and 40% lower than new gas-fired plants (according to UK government estimation). This is especially notable given today's conditions on supply chains and financing cost the sector is experiencing. Interestingly, the government almost doubled the offshore budget (from £900m to £1.79bn) to capture more good‑value projects—helping accelerate the build‑out and demonstrating a pragmatic use of CfD flexibility. The CfD design was updated in this round to provide 20 years of support (instead of 15 years) to strengthen investor confidence in a higher‑cost environment. Other key elements, such a full strike price indexation and using the GB day‑ahead as direct reference price, remained in place. 🔗 Government announcement: https://lnkd.in/epkK9sEQ #OffshoreWind #CfD #EnergyPolicy #UKEnergy #Renewables

🇬🇧 UK CfD Allocation Round 7 (AR7): Winners, Losers, Sell-downs and Cancellations – What it really tells us about the market With AR7 now settled and the dust beginning to clear, a few structural signals are emerging beyond the headline “8.4 GW awarded”. 🏆 CfD Winners (Offshore & Floating) Fixed-bottom • Dogger Bank South East & West – RWE • Norfolk Vanguard East & West – RWE • Awel y Môr – RWE • Berwick Bank Phase B – SSE Renewables Floating • Erebus (Celtic Sea) – Blue Gem Wind • Pentland (Scotland) – CIP / Hexicon / Eurus 🔄 Post-award monetisation • RWE has already sold down 50% of Norfolk Vanguard to KKR, underlining the classic post-CfD capital-recycling model: secure revenue → crystallise value → de-risk balance sheet → recycle into next pipeline. Expect more of these sell-downs once FIDs approach. ❌ Projects now cancelled after missing AR7 • Blyth Floating Phase 2 (EDF / Tenaga) – cancelled following failure to secure a CfD • (Earlier context) Hornsea 4 (Ørsted) – cancelled pre-AR7, but part of the same cost-pressure narrative 🚫 Likely AR7 bidders that did not secure CfDs Based on ORE Catapult’s “eligible to bid” list vs the awarded projects, the following large schemes almost certainly went into AR7 and came out empty-handed: Fixed-bottom • Rampion 2 • Sheringham Shoal Extension • Seagreen 1A • North Falls • Dudgeon Extension • East Anglia ONE North • Five Estuaries • Norfolk Boreas • Outer Dowsing • West of Orkney • Remaining phases of Berwick Bank beyond Phase B Floating • White Cross (Celtic Sea demonstrator) • Smaller Pentland demo phase In addition, industry reporting points to: • Mona / Morgan (Irish Sea, EnBW / BP) missing out in AR7 and now being re-phased / re-structured. ⸻ 📉 What AR7 really shows 1. Extreme capital selectivity – Only ~1/3 of eligible offshore capacity cleared the budget. 2. Industrial-scale balance sheets win – RWE and SSE dominated. 3. Floating still rationed, not scaled – Two small projects funded, industrialisation still pending. 4. CfD ≠ project certainty – Some losers are now cancelled, others will be rebid, resized or re-timed. 5. Capital recycling is accelerating – Sell-downs like RWE-KKR are becoming the standard post-award play. My View - AR7 was not just an auction. It was a capital allocation stress test for the entire UK offshore wind pipeline. What do you think? #OffshoreWIND #FloatingWind

Allocation Round 7 becomes the largest UK auction to date with a last minute budget raise. A total of 8.2 GW of fixed-bottom and 192.5 MW of floating offshore wind projects have been awarded CfDs, an increase of 1.4 GW above the previous record holder, AR4. This was made possible by the budget being raised significantly to £1.79 billion on 19 December, with the total cost of the round coming in at £1.783 billion/year, another record. Fixed strike prices are up around £9/MWh (in 2024 prices) with English and Welsh projects receiving £91.2/MWh and the Scottish project receiving 89.49/MWh. Floating strike prices are also up £21.5/MWh, coming in at £216.49. The winners are: England and Wales • Dogger Bank East - 1.5 GW • Dogger Bank West - 1.5 GW • Norfolk Vanguard East - 1.545 GW • Norfolk Vanguard West - 1.545 GW • Awel y Môr - 775 MW Scotland • Berwick Bank B - 1380 MW Floating • Erebus - 100 MW • Pentland - 92.5 MW What does this mean for the industry? We are going to see a lot of demand across the supply chain. While delivery years are spread from 2028-2031, this will require a lot of turbines, foundations, and vessels to realise. Hopefully, releasing some of the strain the supplier industry has been under due to a shrinking market from 2022. Last year 6.5 GW of FIDs were made globally (exc China), which means we could see more FIDs in the UK this year alone, than globally last year. This is a very good signal for the industry. Unfortunately, strike prices going up does mean the consumer may be impacted, however, earlier insights (by Aurora Energy Research) suggested that, given the current state of the market, £94/MWh was the limit before the consumer would be impacted. Today is a good day for the industry.

General consensus seems to be this is a very big day for the UK's clean energy sector and a major success for the government. The 8GW of new offshore wind power projects to be awarded contracts is at the upper end of expectations and with more to come next month from the auction for onshore wind and solar it keeps the clean power by 2030 goal within reach. The prices have gone up on the back of higher development costs for offshore wind developers, but they are not as bad as some had feared and the government maintains these projects are considerably cheaper than building and running new gas power plants. The headline prices above current wholesale power prices mean Labour will continue to face fierce criticism in the right wing press from those who argue net zero will push up costs. But there are good reasons to think this new fleet of offshore wind projects will have a dampening effect on wholesale power prices that will lead to lower costs for consumers even when the subsidy contracts are taken into account. And what the projects definitely will do is reduce reliance on gas imports and exposure to volatile fossil fuel prices. Big challenges remain, not least in delivering the projects on time and providing sufficient grid and storage capacity to ensure as much as possible of the clean power they produce is used. But this is a very good day for the UK's green economy, and by extension the economy as a whole. You can read all the details here and we'll have more reaction on BusinessGreen throughout the day: https://lnkd.in/e9zc5WCF

Today’s CfD Round 6 announcement brings a mixed takeaway - some left with plenty of reason to celebrate, others left empty handed and all with a continued need to track development of the industry to ensure these projects go live - supply chain readiness being a top priority. Key Highlights: Floating Offshore Wind (FOW): The standout in this category is the Green Volt project (400 MW), which secured a strike price of £139.93 in 2012 prices (£195 in 2024 prices - Jan). This is a promising step with a clear commercial-scale project, though it’s notable that only one FOW project made the cut this round. Way to go Vårgrønn and Flotation Energy with a significant show to commercialize floating wind! Returning Projects from AR4: Four projects from the previous allocation round successfully secured higher CfD portions, adding up to 1,578 MW. These include Inch Cape, Moray West, Hornsea 3, and East Anglia 3, all at a strike price of £54.23 (equivalent to £75.7 in 2024 prices - Jan). This move is crucial as it strengthens the financial viability of these significant offshore wind initiatives. New Projects: Two new offshore wind projects made their debut in AR6, with Hornsea 4 (2,400 MW) and East Anglia 2 (963 MW) leading the charge. Both secured a strike price of £58.87 (equivalent to £82.16 in 2024 prices - Jan). These projects mark a much needed addition to the UK’s offshore wind capacity, ensuring continued growth in the sector... but the industry had hoped for more (call us greedy for green). In Summary: 3.36 GW of new offshore wind projects. 0.4 GW of floating wind. 1.58 GW of increased CfD portions for existing projects from AR4. A special mention goes to Ørsted, the big winner in this round, securing 2.4 GW out of the 3.36 GW of new projects and 1.08 GW out of the 1.58 GW of increased portions from AR4... wishing the industry peers such as RWE all the best to get their eligible GW-projects awarded in AR7. While CfD Round 6 is a positive step, the results highlight both the progress and the challenges ahead. The lower number of new projects and the reliance on adjusting older projects indicate a maturing market but also underscore the need for a continued pressure to get budget allocations to spur project and supply chain investment to deliver on the climate targets.