UK to launch much anticipated energy auction in August

The Department for Energy Security & Net Zero has confirmed that 7 August 2025 is the prospective commencement date for Allocation Round 7 (AR7), and the application window will be 7-27 August 2025.

AR7 comes at a critical time for the UK government’s clean-energy plan and net-zero strategy, after the shock to the market in AR5 in 2024, with no offshore wind projects bid due to the administrative strike price (ASP) – that is the ceiling price for bids – set below economic levels.

A correction occurred to the ASP in AR6, which enabled 3.36 GW of capacity to be procured, but record amounts of capacity now need to be awarded in the next two allocation rounds if the UK is to meet its 2030 target for clean energy.

To meet the government target of between 43 and 51 GW of installed offshore wind capacity by 2030, there are only two more auctions, AR7 and AR8, that can realistically deliver operational projects by then, so a great deal depends on how much capacity is procured in both.

Analysts suggest that to achieve 2030 targets for clean power and offshore wind, the two auctions combined need to deliver up to 20 GW of offshore wind, along with 7-8 GW of onshore wind and 23-24 GW of solar PV.

Offshore Energies UK (OEUK) warned recently the UK will miss the government’s Clean Power 2030 target without significant action to address key challenges, including price inflation, capital cost and supply chain competitiveness.

“If the UK is to meet Clean Power 30 objectives, AR7 will have to be the largest ever, with more than 8 GW of new licences awarded,” said OEUK in its 2025 Wind Insight report.

“As the halt to Hornsea 4 windfarm in recent weeks shows, cost inflation, finance costs and market outlook make investment in offshore wind all the more challenging, putting additional pressure on Clean Power 30 delivery. Unless the pace of change quickens, the UK stands to achieve only 35 GW by 2030, short of the Clean Power target.”