Offshore Energies UK (OEUK) has warned that the UK must approve a record-breaking 8.4 GW of offshore wind capacity in the latest annual licensing auction (AR7) if it is to meet its 2030 clean energy targets.

According to the organization, the previous auction rounds, AR5 and AR6, failed to attract sufficient bids due to the strike prices being too low for most developers. Since AR4, only one fixed offshore wind project and one floating wind project have been approved, with a combined capacity of just 1.3 GW — a significant shortfall in the UK’s projected offshore wind generation plans.

Further delays in offshore wind deployment have also resulted from a rule preventing floating wind developers without full planning consent from participating in the AR7 auction.

OEUK also highlights that floating wind turbines, which are located farther offshore, tend to face less public opposition than fixed turbines. Moreover, the UK supply chain is well-positioned to support the development of this emerging technology, which offers strong potential for growth.

Offshore wind auctions operate under the Contracts for Difference (CfD) scheme, which provides developers with a guaranteed "strike price" for the electricity they generate.

This mechanism ensures a fixed income for wind energy projects: if market prices fall below the strike price, the government covers the difference; if prices rise above it, wind farm operators pay the surplus back to the government.

This system helps stabilize revenue streams for capital-intensive renewable projects, reduces risks tied to wholesale electricity price volatility, and contributes to more stable prices for consumers.

Administrative strike prices (ASPs) have increased by 10% for both fixed and floating offshore wind compared to last year’s AR6 auction. ASPs represent the maximum price per megawatt-hour (MWh) that a project of a particular technology type can receive.

Thibaut Cheret, OEUK’s Offshore Wind Lead, stated taht "it is possible to boost the UK’s offshore wind generation through the deployment of the next generation of floating turbines, alongside fixed ones. Floating turbines can generate 25% more electricity, and in future auction rounds, the government should allow the same consenting flexibility for floating wind projects as it does for fixed ones."