Commenting on the results of the Contracts for Difference (CfD) Allocation Round 7 (AR7) for offshore and floating offshore wind published today, Simon Virley CB, Vice Chair and Head of Energy and Natural Resources at KPMG UK, said:
"Securing 8.4GW of offshore wind contracts in the latest renewables auction (AR7) sends a strong signal that the UK remains a leading destination for clean energy investment. The Government’s decisions last year to extend the CfD contract term for offshore wind to 20 years, and avoid wholesale reforms to the electricity market, has helped maintain investor confidence at a time when other renewables auctions have failed.
"While some may question the average auction price of £90.91/MWh as being above the current electricity price, it’s important to recognise that the UK faces an urgent need to replace ageing gas and nuclear capacity by 2030. AR7 demonstrates that offshore wind remains cost-competitive against new-build gas and nuclear plants, even taking system costs into account, and the CfD framework continues to deliver value for money over the long term, by reducing our exposure to volatile fossil fuel prices set in international markets.
"The real challenge now is to ensure this investment translates into high-quality UK jobs and a robust domestic supply chain, so the benefits of the energy transition are felt across the economy."
