Published by Global Banking & Finance Review®
Posted on July 24, 2025
2 min readLast updated: January 22, 2026
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Britain raises offshore wind auction prices by 11% due to rising costs. The UK targets 43-50 GW capacity by 2030 to decarbonize electricity.
By Susanna Twidale
LONDON (Reuters) -Britain will increase the guaranteed price offered for offshore wind projects in this year’s renewables auction by 11%, government documents showed, amid rising costs for projects due to inflation and supply chain bottlenecks.
The Labour government is facing mounting pressure from opposition parties over the affordability of its net-zero plan and following a 66% rise in the prices offered for offshore wind during last year’s auction.
"Renewable technologies continue to face macroeconomic uncertainty and supply chain constraints – this is particularly true for wind technologies," the Department for Energy Security and Net Zero said in a document published late on Wednesday.
The country has put offshore wind at the heart of its plans to decarbonise its electricity sector by 2030. It aims to boost capacity to 43-50 gigawatts (GW) by the end of the decade, from around 15 GW currently.
In Britain’s annual renewables auctions project, developers bid for contracts-for-difference (CfD), which offer them a guaranteed price for their electricity.
If wholesale prices go below the guaranteed level, or strike price, the government makes up the difference with this cost ultimately recovered by levies on consumer bills. If wholesale prices are below the strike price, the developers pay back the difference.
Offshore wind projects will be offered a strike price of 81 pounds per megawatt hour (MWh) in 2012 prices, up from the 73 pounds per MWh offered in last year’s auction.
Floating wind projects, the technology for which is at an earlier stage of development, will be offered at 194 pounds per MWh, up from 176 pounds previously.
"Whilst construction costs have increased over recent years, this has also been felt across major infrastructure projects... This is the case for gas-fired power plants, as it is for wind turbines," Adam Berman, director of policy and advocacy at industry group Energy UK, said in a separate statement.
Application rounds for the auction, called AR7, will begin in August with the results announced between December and the end of February 2026.
(Reporting by Susanna Twidale, editing by Ed Osmond)
Offshore wind projects will be offered a strike price of 81 pounds per megawatt hour (MWh) in 2012 prices, up from 73 pounds per MWh offered in last year’s auction.
The increase in price guarantees comes amid rising costs for projects and mounting pressure from opposition parties regarding the affordability of the government's net-zero plan.
Application rounds for the auction, called AR7, will begin in August, with results announced between December and the end of February 2026.
Renewable technologies are facing macroeconomic uncertainty and supply chain constraints, particularly affecting wind technologies.
Floating wind projects will be offered a strike price of 194 pounds per MWh, up from 176 pounds previously.
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