UK freezes maximum price it will pay in next offshore wind auction

The newly-published ‘Contracts for Difference Scheme for Renewable Electricity Generation, Allocation Rounds 8: Contract Allocation Framework, July 2026’ indicates the Department for Energy Security and Net Zero (DESNZ) has decided to maintain the ASPs that were set in the last, record-breaking auction round, Allocation Round 7 (AR7).

This means that the ceiling price it will pay for bottom-fixed offshore wind projects remains at £113/MWh. For floating wind projects the ceiling price is £271/MWh. DESNZ has also set the same ceiling for so-called ‘other deep water offshore wind.’ 

DESNZ said its decision was intended to provide stability between allocation rounds and also reflects the Government’s central focus on competitive price outcomes in AR8.  

An ASP is the maximum price that developers are allowed to bid in an auction. It is not the price that successful projects will receive, and is deliberately set above the level the Government expects projects to bid, allowing enough flexibility for developers to participate while encouraging competition and setting an eligibility ceiling. Projects in previous auction rounds have consistently secured contracts below the ASP. 

AR8 does however include a number of changes designed to improve value for money, support project delivery and make the auction more flexible. One of the biggest changes is that the Government will be able to set the final budget for solar, onshore wind and fixed-bottom offshore wind after receiving confidential bid information. This will allow Ministers to see how much renewable capacity is available at different prices before deciding how much to procure, helping to secure the best value for consumers. 

Responding to the AR8 framework unveiled by the government, Energy UK Deputy Director of Policy Kisha Couchman,  said, “AR8 is a critical moment for the UK’s security, resilience, and economic growth. With the impacts of the conflict in the Middle East now being felt on energy bills, the importance of reducing our exposure to volatile international gas prices, strengthening our energy security, and protecting people from future price shocks is clearer than ever.

“The long-running Contracts for Difference (CfD) scheme has consistently shown itself to be the most effective means of securing investment in clean energy at the lowest cost for customers. It offers the long-term certainty and stability necessary to unlock billions of pounds of private investment and ensures households and businesses are shielded from both excessive costs and excessive profits.

“The previous allocation round revealed the record-breaking scale of private investment waiting to be deployed in the UK, and AR8 is another opportunity to build on that success. If AR8 repeats that £22Bn achievement, both households and investors will feel the benefit of the clean energy projects that will follow. Despite an increase in construction costs for all infrastructure projects, a strong AR8 will help drive down energy bills for customers, as well as provide confidence for developers, investors and supply chains to invest, innovate and support thousands of good jobs across the UK.”

In March this year, the Government said it would bring forward AR8 – an auction in which large numbers of offshore wind developers are expected to compete – as part of a raft of measures designed to ‘go further and faster’ in the pursuit of national energy security. The application window for AR8 is due to opens on 20 July and will close on 7 August 2026.

AR7, the result of which was announced earlier this year, delivered 8.4 GW of capacity, the single largest procurement of offshore wind Europe has seen.