The sixth Allocation Round of Contracts for Difference (CfD) has broken records, with 131 clean energy projects set to be launched in the UK. In total these developments are expected to generate enough green energy to power 11 million UK homes, and once the new projects are completed, the UK will be home to the world’s largest floating offshore scheme as well as Europe’s largest offshore wind farm[i].
The auction forms part of the new UK Government’s green policy which has seen more than £1.5 billion allocated for the most recent round of CfD funding. In this latest Allocation Round 6 (AR6) a total of 9.6 GW of renewable energy capacity was awarded, this includes 4.9 GW for fixed offshore wind projects, 990 MW for onshore wind, and 400 MW for floating offshore wind[ii].
The increase in allocation has delivered the biggest CfD auction to date, with 131 projects now backed, compared with the previous Round (AR5) held in September last year which delivered 92 projects. Whilst last year's AR5 auction failed to see a single successful bid for offshore wind projects, AR6 has delivered nine, including contracts for Europe’s largest and second largest windfarm projects 'Hornsea 3' and 'Hornsea 4' off the Yorkshire coast.
Additionally, the world’s largest floating offshore wind project ‘Green Volt’ received backing, and once complete, the project will see floating wind turbines provide 400 MW of renewable energy capacity[iii]. This project is expected to double the size of Europe’s total installed floating offshore wind capacity once operational. Notably, the tidal sector also saw success in AR6, with six new projects receiving backing. Once these are online almost 50% of the worlds tidal stream capacity will be found in UK waters.
Announcing the results, Ed Miliband, Secretary of State for Energy Security and Net Zero said:
“The Sixth Contracts for Difference (CfD) auction results have been published today (3rd September), unlocking 9.6GW of renewable electricity projects. Amongst others, contracts will be going to the two largest offshore wind farms in Europe, the world’s largest floating offshore windfarm to date and record numbers of solar projects. These results are over 2.5 times bigger than Allocation Round 5. These new projects will boost energy independence, secure cheap power for families, and unlock economic growth and jobs for the country”.[iv]
While many in the renewable energy sector are pleased with the AR6 results, there remain concerns that more wasn’t achieved this round, particularly with regards to increasing offshore wind capacity. As set out in the Kings Speech back in July, the UK’s new Labour Government is committed to doubling onshore wind and quadrupling offshore wind by 2030, as a cornerstone of its goal to fully decarbonise electricity by 2030. That translates to increasing onshore wind from 15 to 30 GW, and offshore wind from 15 to 60 GW. This year’s auction total of 4.9GW is half what is needed each year to meet government targets, it is also lower than the 7GW achieved in the last successful offshore wind CfD auction held in 2022, where this auction also saw a higher overall total of 11GW of renewable energy capacity achieved (compared with 9.6GW in AR6).
Ami McCarthy, Greenpeace UK’s political campaigner, said:
“This urgently needs to be followed up with a much bigger auction next year, as well as investment for faster grid connections, better planning, and more storage to hold the green power for when it’s needed.”[v]
Tom Glover, RWE UK Country Chair also raised concerns over this, stating:
“If the government wants to deliver on its target to quadruple offshore wind to 60 GW by 2030, it will need to significantly ramp up procurement. It is therefore important that the government urgently review and confirm the parameters for next year’s auction, and ensure it takes place as planned next summer”[vi].
[i] Written statements - Written questions, answers and statements - UK Parliament
[ii] UK solar power wins record backing in latest auction - Energy Live News
[iii] Contracts for Difference Allocation Round 6 results (publishing.service.gov.uk)
[iv] Written statements - Written questions, answers and statements - UK Parliament
[v] UK to gets nine new offshore wind farms | The Independent
[vi] RWE welcomes success for onshore and solar projects in latest UK CfD auction
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
