The UK Government has set a total budget of £1.08 billion for Allocation Round 7 (AR7) of the Contracts for Difference (CfD) scheme, aimed at boosting new fixed-bottom and floating offshore wind installations.

According to the notice issued by the Department for Energy Security and Net Zero (DESNZ), £900 million will be allocated to Pot 3, which covers fixed-bottom offshore wind projects, with delivery years set between 2028-29, 2029-30, and 2030-31. Meanwhile, floating offshore wind projects will compete in Pot 4, which has a budget of £180 million and delivery years for 2028-29 and 2029-30.

Both amounts are set in 2024 prices, and according to DESNZ, no overall capacity limits will be applied, although separate maxima of 30 GW have been established for Scottish and non-Scottish offshore wind projects.

This new auction round, officially opened on 7 August 2025, seeks to consolidate the UK’s leadership in offshore wind energy within the framework of European decarbonisation goals for 2030. However, industry representatives have warned that the announced budget may be insufficient to maintain the country’s growth pace and installation targets.

Industry reaction: “The budget puts investment and UK leadership at risk”

The announcement of the AR7 budget has raised concerns among leading wind energy associations, which warn of a potential negative impact on investment and employment in the United Kingdom.

Ana Musat, Executive Director of Policy and Engagement at RenewableUK, stated that the announced budget “will not maximise investment in new offshore wind farms.” According to Musat, more than 20 GW of offshore wind capacity is eligible for this auction, but with the current amount, only around a quarter of that could be secured.

“The Government should adjust the budget to maximise contracting, which could attract up to £53 billion in private investment into the UK economy,” said Musat.

She also highlighted the importance of further supporting floating offshore wind, which can strengthen supply chains and help reduce costs in the coming decade. Musat recalled that each additional gigawatt of offshore wind capacity generates between £2 and £3 billion for the economy and that, with the right support, the sector could more than double its workforce from 40,000 to 95,000 by 2030.

For its part, WindEurope described the Government’s decision as “disappointing,” warning that it could severely constrain the sector’s growth. According to its analysis, the £900 million for fixed-bottom and £180 million for floating wind would only enable the award of between 5 and 6 GW of new capacity — far below the UK’s target of 50 GW by 2030.

“With this budget, the UK would lose £53 billion in private investment and 45,000 jobs,” warned Giles Dickson, CEO of WindEurope.

The association also noted that the budget does not represent direct spending but a maximum financial support cap. The maximum strike prices set by the Government are £113/MWh for fixed-bottom offshore wind and £271/MWh for floating wind, reflecting the higher costs of the latter technology.

Dickson stressed that a low-volume auction would undermine the UK’s leadership in offshore wind and negatively impact the entire European supply chain, which relies heavily on the strength of the UK market.

“There are many high-quality projects ready to be built. It would be a huge missed opportunity if only a quarter of them move forward,” he concluded.