UK doubles CfD Allocation Round 7 offshore wind budget, secures record 8.4 GW

Mechanism

CfD is the UK's flagship renewable-generation subsidy mechanism: developers bid a strike price in a sealed-bid auction, and the government pays the difference between that strike price and the wholesale market reference price for 15 years, guaranteeing revenue certainty. DESNZ increased the fixed-bottom offshore wind budget pot for AR7 from GBP 900m to GBP 1.79bn in the run-up to the January 2026 auction after developer feedback (via RenewableUK and others) argued the original budget would leave viable capacity unbid. The larger pot let DESNZ clear 8.4 GW instead of a materially smaller volume, at strike prices (~GBP 89-91/MWh) that cleared below the ceiling price, which is the quantitative basis for severity here (budget more than doubled; capacity secured is UK's largest single CfD round to date).

AR7 in total (including onshore technologies awarded separately in February 2026) reached 14.7 GW across 201 projects.

Downstream implications

• Offshore wind turbine, foundation, and cable suppliers (Vestas, Siemens

Gamesa, subsea-cable makers) see a multi-year UK demand signal.

• RWE's 6.9 GW award materially expands its UK generation pipeline and

underpins its KKR partnership financing.

• The budget-doubling precedent strengthens the case for similarly-sized

pot increases in future CfD rounds (AR8+) if early bidding signals show under-subscription risk.

Open questions

• Whether the GBP 22bn private-investment estimate is realized on the

stated timeline given UK grid-connection queue constraints.

• Whether the higher clearing strike price (~GBP 91/MWh vs. AR6's lower

clearing price) marks a structural cost reset for UK offshore wind or a one-round anomaly tied to global supply-chain and financing costs.