Contracts for Difference Allocation Round 7 results: comment

CfD AR7 results secure record 8.4GW of offshore wind capacity at a strike price of around £91/MWh (2024 prices)

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By Jess Ralston

info@eciu.net

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Commenting on Contracts for Difference Allocation Round 7 results published today, which secured a record 8.4GW of offshore wind capacity at a strike price of around £91/MWh (2024 prices), [1] Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), said: “This is set to be a breakthrough moment in the UK’s energy independence and for stabilising household and industry’s energy bills. Wind lowered the wholesale power price by around a third last year by squeezing out gas generation, which has a direct benefit on electricity bills. [2] At today's auction price, it is predicted to pay back a little via levies on bills too.

"Every wind turbine we build means we need less gas from abroad as the North Sea continues its inevitable decline, so we'll be less reliant on the actions of foreign actors like Putin. Once we've built British renewables, we don't need to pay another country for the wind and sun. With jobs being lost from oil and gas in the North Sea for many years, the speedy ramp up of offshore wind is needed to provide new opportunities for workers and communities across the UK."

New ECIU analysis shows that the average price of electricity traded on day-ahead markets last year was around £83 per megawatt-hour (MWh), but could have been as high as £121 per MWh, without British windfarms limiting the role of gas power plants in setting prices. [2] The saving of around £38 per MWh amounts to a price cut of 31% (almost a third).


ENDS

Notes to editors:
 

  1.  DESNZ: https://assets.publishing.service.gov.uk/media/6966861de8c04eb2919f773a/contracts-for-difference-allocation-round-7-results-.pdf 

     

  2. ECIU: https://eciu.net/media/press-releases/wind-farms-cut-power-prices-by-almost-a-third-in-2025 

     

  3. A recording of yesterday's media briefing on AR7 is available to download here: https://we.tl/t-vJIVtwG65J 

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: 07517 407687, email: george.smeeton@eciu.net