Commenting on the announcement today (October 27) by the Department for Energy Security and Net Zero (DESNZ) of the budget for the Contracts for Difference (CfD) Allocation Round 7 (AR7) to support new offshore wind projects, Claire Mack OBE, Chief Executive of Scottish Renewables, said: 'This year’s auction is a pivotal moment to inject fresh momentum into Scotland’s offshore wind sector and build on the strategic investments made in our supply chain to date. An auction that fails to deliver for Scotland will seriously undermine our ability to maintain and secure the growth that is essential for energy security.
'A record amount of capacity is eligible for AR7 and this fierce competition will ensure new capacity is secured at the best possible value to consumers, despite increasing global cost pressures. The budget announced today would significantly restrict that value from reaching consumers and communities. We urge careful consideration to ensure the final budget best delivers on our long-term national interests.
'Given no contracts have been awarded to new fixed-bottom projects in Scotland since 2022, the industry needs to be reassured that the UK Government remains committed to continued deployment of Scottish fixed and floating offshore wind projects. This will be critical for driving economic prosperity across all corners of the country, including the North East of Scotland.'
Background
- Read the auction announcement by the UK Government.
- The overall auction budget has been set at £1.08 billion overall budget for offshore wind technologies. DESNZ has set a budget of £900 million for fixed-bottom offshore wind projects competing in Pot 3, with set delivery years of 2028-29, 2029-30 and 2030-31. A further £180 million budget has been set for floating offshore wind projects competing in Pot 4, with delivery years of 2028-29 and 2029-30.
- The CfD budget is not a nominal figure paid to projects in the auction but is used as an action parameter to maintain competition between projects. The CfD guarantees a price for the electricity which new renewable energy projects generate. When wholesale prices rise above this guaranteed price, CfD projects pay back the difference to consumers.
Source: Scottish Renewables
