Offshore wind – striking the right note

Quarter of a century in, and the offshore wind industry in the UK never ceases to amaze as it surges forward, stalls magnificently, falls from favour… yet still manages to stay at the vanguard of the renewable energy agenda… no matter what the price.

At the end of last year, UK offshore wind marked its twenty fifth birthday having in December 2000 generated first electricity from the 40MW Blyth Offshore Wind Farm... though it’s rather amusing the extension – the Blyth 2 floater – was canned this week.

The 5-turbine Blyth “array” was delivered by EDF for the princely sum of £4 million, and from the end of 2000 it was keeping the lights on for 3,000 households.

Heady stuff.

IJ reported at the time (December 2000) that the British Wind Energy Association (BWEA) estimated offshore wind farms (OWF) could account for 1.8% of the UK's electricity needs by 2010. And it wasn’t wrong.

Fast forward (almost) quarter of a century and UK government stats – published last summer (July 2025) – reveal that renewable energy accounted for more than half (50.4%) of its electricity in 2024. And of the total electricity generated, OWFs accounted for 17% (48.5TWh).

The UK currently has more than 16GW of operating capacity and targets delivery of upwards of 43GW of offshore wind by 2030.

Putting that into an international setting, the Global Wind Energy Council (GWEC) revealed in 2025 that the offshore wind industry added 8GW of capacity in 2024, bringing the total installed offshore wind capacity globally to 83GW.

But how much are you willing to pay for energy security generated in a far from secure environment as “bad actors” (you know who I’m talking about) prowl these shores, mapping out pipes and cables for future naughtiness?

A choppy market

It’s not been plain sailing for offshore wind on an international basis, and these days it would appear the UK government has cracked open the purse strings to achieve maximum green smug credentials.

Given the number of failed auctions in recent times, it comes as little surprise that – to keep plans on track – you gotta give ’em what they want… and that’s a better strike price.

IJ reported earlier this week that RWE and SSE Renewables had won the UK’s AR7, 20-year CfD auction for fixed-foundation offshore wind with the government awarding 8.4GW of capacity in Europe’s biggest offshore wind auction.

RWE had reason to celebrate with a strike price of £91.20 per MWh for 6.9GW capacity across:

• Dogger Bank South West (1.5GW) and Dogger Bank South East (1.5GW)
• Norfolk Vanguard West (1.4GW) and Norfolk Vanguard East (1.4GW) – CfDs for 3.1GW in total
• Awel y Môr (775MW) – extension to Gwynt y Môr off north Wales

Meanwhile, SSE cleared £89.49 per MWh for the 1.38GW Phase B of the 4.1GW Berwick Bank project off the east coast of Scotland.

Reeling back a little, strike prices have see-sawed around in a clear bid to cut costs on fixed foundation OWFs… before reality landed and they have more than doubled from the strike price of £37.35 that was achieved in AR4.

Two CfD rounds back – AR5 – there was a maximum strike price of £44 per MWh… and the process failed to attract any bidders.

The last one – AR6 – saw that tick up to a point that got results with £58.87 per MWh for Hornsea 4 and East Anglia 2, and £54.23/MWh for another 4 projects. But this wasn't enough to keep Orsted at the table.

And here we sit at £91.20 per MWh which bears little comparison to France where TotalEnergies and RWE were awarded a strike price of €66 (£57.21) per MWh through its equivalent process – AO8 – on the 1.5GW Centre Manche 2.

Views on a numbers game

The consequence of increasing the cost of electricity generation has been met by a mixture of responses from the infrastructure community.

One warns darkly that “normalising £90 per MWh is a disaster for the country” as electricity costs at this level will “make domestic industrial production uncompetitive” and impact energy-intensive sectors.

Meanwhile another is of the view that it’s “a ‘normalised’ price – or at least the world's come back to reality” adding that it makes more sense given gas prices around £150.

The source adds: “So even at around £90, it's still better for the consumer, but only in the long run. Until they stop pricing electricity to the user at the marginal cost of gas, we will remain stuffed.”

Yet another infra veteran casts his mind back to childhood saying: “I remember my grandmother telling me how she used to pay 5p a pint for milk. I'm guessing most people who say this AR7 auction is too expensive already have a Freedom Pass [free public transport for pensioners].

“The price was set through an auction, so the only 2 valid questions to address are 1) do we need 8.4GW and 2) is this the cheapest at scale technology? The answer to both is unequivocally yes.

“If that's not enough to move on, then what about question 3) is net zero a good thing, and 4) is energy security important. Most people would answer yes to these too.

“In America the argument for gas may have more merit given shale, and leadership view on net zero. The UK doesn't have these arguments in its favour.”

But most of all, the UK government has received the message that was so convincingly delivered in 2023 that the market was not crying wolf.