UK CfD Auction Results

Page type: topic-anchored

Related primary-source pages: - CfD Allocation Framework -- the rules governing how each allocation round is run (eligibility, auction mechanics, strike prices, valuation formula). - CfD Standard Terms and Conditions -- the contract terms between LCCC and generators (payment mechanics, Change in Law protection, termination, metering obligations).

Summary

Contracts for Difference (CfDs) are the UK government's main mechanism for supporting new low-carbon electricity generation. A generator agrees a fixed "strike price" with the government. When the wholesale electricity price falls below the strike price, the government tops up the difference; when it rises above, the generator pays back. This gives investors long-term revenue certainty and, in theory, drives down costs through competitive auctions. CfDs have been the single most important policy tool behind the UK's offshore wind build-out since 2015.

All strike prices below are in 2012 prices (the base year used for AR1-AR6) unless otherwise noted. AR7 switched to 2024 prices, making direct comparison harder. A rough conversion factor: multiply 2012 prices by ~1.40 to approximate 2024 prices.

Auction Results

Summary Table

Sources: UK Government AR6 results; UK Government AR7 results; Wikipedia: CfD (UK energy); ORE Catapult AR6 analysis

AR1 (February 2015)

• Capacity: 2,140 MW across 27 projects
• Technologies: Offshore wind (1,162 MW), onshore wind (749 MW), solar (72 MW), advanced conversion (62 MW), energy from waste (95 MW)
• Strike prices: Offshore wind £114–120/MWh; onshore wind £79–83/MWh; solar £50–79/MWh
• Notable projects: East Anglia 1 (714 MW), Neart na Gaoithe (448 MW)
• Context: First-ever CfD auction. Prices reflected early-stage offshore wind costs.

Source: Wikipedia: CfD (UK energy)

AR2 (September 2017)

• Capacity: 3,346 MW across 11 projects
• Technologies: Offshore wind (3,196 MW), advanced conversion (56 MW), dedicated biomass with CHP (86 MW)
• Strike prices: Offshore wind £57.50–74.75/MWh
• Budget: £290m (Pot 2)
• Significance: Offshore wind price halved from AR1. First time offshore wind undercut new gas generation on cost.

Source: Wikipedia: CfD (UK energy)

AR3 (September 2019)

• Capacity: 5,775 MW across 12 projects
• Technologies: Offshore wind (5,466 MW), remote island wind (275 MW), advanced conversion (34 MW)
• Strike prices: Offshore wind £39.65-41.61/MWh, record lows at the time
• Budget: £265m
• Significance: Offshore wind costs fell below £40/MWh in 2012 prices. Carbon Brief described the price as "nine times cheaper than gas" on a like-for-like basis.

Sources: Wikipedia: CfD (UK energy); Carbon Brief analysis

AR4 (July 2022)

• Capacity: 10,792 MW across 93 projects, the largest round by capacity at the time
• Technologies: Offshore wind (6,994 MW), solar (2,209 MW), onshore wind (888 MW), remote island wind (598 MW), floating offshore (32 MW), tidal stream (41 MW)
• Strike prices: Offshore wind £37.35/MWh (all-time low); solar £45.99; onshore wind £42.47; tidal stream £178.54; floating offshore £87.30
• Budget: £285m
• Context: First round to include onshore wind and solar (excluded from AR2/AR3 by a 2015 Conservative manifesto commitment). First-ever CfD for tidal stream.

Source: Wikipedia: CfD (UK energy)

AR5 (September 2023): The Failed Round

• Capacity: 3,698 MW across 95 projects
• Technologies: Solar (1,928 MW), onshore wind (1,481 MW), remote island wind (224 MW), tidal stream (53 MW), geothermal (12 MW)
• Strike prices: Onshore wind £52.29; solar £47.00; tidal stream £198.00; geothermal £119.00
• Budget: £205m (£170m Pot 1, £35m Pot 2)
• What went wrong: Zero offshore wind bids. The administrative strike price (the maximum allowed bid) was set at £44/MWh in 2012 prices. This no longer reflected real-world costs after post-COVID inflation, rising interest rates, and supply chain disruption. Industry had warned beforehand that the price ceiling was too low. The round was widely described as a policy failure.

Sources: Wikipedia: CfD (UK energy); ORE Catapult AR6 analysis

AR6 (September 2024): The Recovery

• Capacity: 9,648 MW across 131 projects
• Technologies: Offshore wind (3,363 MW new + 1,572 MW re-bids from AR4), floating offshore (400 MW), solar (3,288 MW), onshore wind (990 MW), tidal stream (28 MW)
• Strike prices: New offshore wind £58.87/MWh; re-bid offshore £54.23; floating offshore £139.93; solar £50.07; onshore wind £50.90; tidal stream £172.00
• Budget: £1,555m, increased from £1,010m after Labour took office in July 2024 (a 54% increase)
• Key details:
• Government raised the administrative strike price for offshore wind from £44 to £73/MWh (2012 prices) after the AR5 failure
• 1.6 GW of the offshore capacity was from projects that had previously won AR4 contracts but exercised "permitted reductions" (withdrew capacity) because AR4 strike prices had become unviable due to cost inflation. These projects re-bid at higher prices
• First commercial-scale floating offshore wind CfD (GreenVolt, ~400 MW)
• Ofgem received appeals from non-qualifying applicants, extending the round to the longest possible timeline (scenario 5)
• Reaching the government's 60 GW offshore wind target by 2030 would require ~10.6 GW per remaining round, an acceleration far beyond any achieved so far

Sources: UK Government AR6 results; ORE Catapult AR6 analysis; Herbert Smith Freehills AR6 briefing

AR7 (January/February 2026): Record Round

AR7 was split into two stages: offshore wind results (14 January 2026) and established technologies (10 February 2026).

• Capacity: 14,670 MW across 201 projects, the largest CfD round ever and the largest single offshore wind procurement in Europe
• Technologies: Offshore wind (8,245 MW), solar (4,905 MW), onshore wind (1,306 MW), floating offshore (193 MW), tidal stream (21 MW)
• Strike prices (2024 prices, new base year): Offshore wind £89.49–91.20; solar £65.23; onshore wind £72.24; floating offshore £216.49; tidal stream £265.00
• Budget: ~£2,100m (£1,790m for offshore wind, with budget increased mid-round from £900m; £295–310m for established technologies)
• Contract changes: Contracts extended from 15 to 20 years for wind and solar; onshore repowering after 25 years enabled; phased offshore construction permitted; projects no longer need full planning consent to bid
• Major winner: RWE secured 6.9 GW of the 8.4 GW offshore wind total
• Concentration concern: RWE's dominance raised questions about competition in future rounds

Sources: UK Government AR7 results; Energy UK AR7 explainer; Osborne Clarke AR7 analysis

Offshore Wind Strike Price Trajectory

The story of CfD strike prices is, more than anything, the story of offshore wind costs:

The cost reduction story (AR1–AR4): Between 2015 and 2022, offshore wind strike prices fell by roughly 69%, from £120 to £37/MWh. This was driven by larger turbines, better supply chains, lower financing costs, and fierce competition between developers. It was one of the most dramatic cost reductions in energy history and became a central justification for CfD policy.

The reversal (AR5–AR7): Post-COVID inflation, rising steel and copper prices, higher interest rates, and supply chain bottlenecks ended the downward trend. AR5 saw no offshore bids at all. AR6 and AR7 recovered volume but at significantly higher prices. The era of ever-falling strike prices appears to be over, at least for now.

What this means: The CfD scheme successfully drove offshore wind from an expensive niche technology to the cheapest form of new generation in the UK. But the price floor is higher than the 2019-2022 lows suggested. Policy now needs to manage costs in a world where offshore wind is cheap but not getting cheaper.

Sources: Wikipedia: CfD (UK energy); ORE Catapult AR6 analysis

Current Reform Debate

REMA (Review of Electricity Market Arrangements)

REMA is the government's review of how the entire electricity market works, including CfDs. It launched in 2022 and reached a major decision point in July 2025.

Key decision (July 2025): The government rejected zonal pricing and will keep a single national wholesale electricity price. The reasons given: - Zonal prices would create unstable long-term investment signals - Different prices in different regions would raise fairness concerns - Implementation would take ~7 years and cause major market disruption

Instead, the government chose "reformed national pricing": keeping one wholesale price but improving locational signals through network charging reforms and a Strategic Spatial Energy Plan (SSEP), due in late 2026.

Source: REMA Summer Update 2025, GOV.UK

CfD-Specific Reforms

Several changes are under discussion or already implemented:

1. 20-year contracts (implemented for AR7): Extended from 15 years. Gives developers longer revenue certainty, which should reduce the risk premium priced into bids.

2. Budget flexibility (implemented for AR7): The Secretary of State can now review anonymised bid data before setting final technology budgets, allowing mid-round adjustments if bids represent good value.

3. Planning consent relaxation (implemented for AR7): Mature offshore wind projects can now bid before receiving full planning consent, widening the pool of competitors.

4. Deemed generation (under discussion): Instead of paying generators based on actual output, CfDs could pay based on predicted output for a given location. This would remove the incentive to generate at times of very low or negative prices and reduce curtailment costs.

5. Market exposure (under discussion): Partially exposing CfD generators to wholesale prices, for example through a "cap and floor" rather than a fixed strike price, to encourage generators to respond to price signals. Industry has pushed back on this, arguing it would increase risk and raise financing costs.

6. Price cannibalisation (ongoing concern): As more renewables come online, they drive down wholesale prices during windy/sunny periods. This increases the difference payments the government must make, raising consumer costs. Reforms aim to give generators incentives to co-locate with storage or shift output to higher-value periods.

Sources: DESNZ CfD and Capacity Market Scheme Update 2025; RenewableUK CfD reform proposals

RenewableUK's Five Reform Proposals

The industry body RenewableUK published reform recommendations in 2024:

1. Use weighted-average independent price curves instead of government assumptions that overestimate costs
2. Set long-term capacity targets for each auction and deployment goals beyond 2035
3. Extend contract tenure to 20+ years (now implemented)
4. Allow delivery year flexibility for grid delays and supply chain problems
5. Enable floating offshore phasing, hybrid metering, and repowering eligibility

Source: RenewableUK via Solar Power Portal

Timeline

• Late 2025: Reformed National Pricing Delivery Plan; full REMA cost-benefit analysis; Capacity Market consultation response
• Late 2026: First Strategic Spatial Energy Plan (SSEP)
• By 2029: Network charging (TNUoS) reform completion

Source: REMA Summer Update 2025, GOV.UK

Key Data Points

Numbers commonly cited in energy policy debates:

Notes on Data Quality

• Strike prices from AR1–AR6 are in 2012 prices. AR7 switched to 2024 prices. Comparing across all rounds requires conversion. A rough multiplier of ~1.40 converts 2012 to 2024 prices, but this is approximate.
• "Capacity awarded" means capacity offered a CfD contract. Not all projects reach financial close or get built. AR4 saw significant attrition (1.6 GW of offshore projects withdrew and re-bid in AR6).
• Budget figures represent the maximum annual cost to the Levy Control Framework or its successor. They are not one-off payments. CfDs pay out over the contract lifetime (15 or 20 years).
• The 60 GW by 2030 target is widely regarded as unachievable. Cumulative CfD-awarded offshore capacity through AR7 is approximately 28 GW, though installed and operational capacity is substantially lower.

Last updated: 25 March 2026 Compiled from UK Government publications, ORE Catapult, Wikipedia, Carbon Brief, Energy UK, and other sources as cited above.