Hopes of advancing offshore wind development in the UK have stalled after no developers bid for any new offshore wind projects in the government auction.

The results of the 5th round of Contracts for Difference (CfD), published by the government, showed that 3.7 gigawatts (GW) of new renewable capacity was successful overall. The lowest level since 2017 and just over a third of the 10.8GW in last year’s auction.

With no offshore wind present, the government confirmed 1.9GW of solar at £47.00 per megawatt hour and 1.5GW of onshore wind capacity at £52.29/MWh, as well as 53 megawatts (MW) of tidal power at £198.00/MWh. The new projects will come online from 2025 onwards. 

Industry has previously warned that prices needed to rise to reflect the impacts of the invasion of Ukraine, inflation in key commodities like steel, and increased financing costs from spiralling interest rates. However, offshore wind developers saw the maximum price they could bid in this year’s auction cut by £2 to £44 per megawatt hour (MWh).

According to RenewableUK, in this auction round for clean power contracts, up to 5GW of offshore wind was eligible to compete which could have powered nearly 8m homes a year and saved consumers £2bn a year compared to the cost of electricity from gas – a £24 annual saving on an average household bill. However, offshore wind projects did not bid into the auction as a result of the maximum price being set too low.

The Co-Chair of the Offshore Wind Industry Council, Richard Sandford, said that "although the auction results are disappointing, the offshore wind industry’s continued focus is working closely with the Government to reform the auction process so that we can secure far more capacity next year and beyond. The UK has the second largest offshore wind pipeline in the world, with more than a hundred projects at all stages of development."

“It’s clear that this year’s auction represents a missed opportunity to strengthen Britain’s energy security and provide low-cost power for consumers. If all the offshore wind projects eligible to bid into this auction had done so, we could have powered the equivalent of more than five million British homes a year. So, lessons must be learned to ensure that the parameters of the auction are set correctly in the future. The landmark report published earlier this year by the Government’s offshore wind champion Tim Pick shows how the industry can grow successfully in the years ahead," Sandford explained.