With 19.7GW of eligible projects – 16.2GW of fixed bottom and 3.4GW of floating projects – and industry forecasts of new offtake contracts of about 6.3GW to reach the 43GW proposed under Clean Power 2030, two experts offer insight into the landmark auction.

A LEVEL OF CAUTION AND A NEED FOR AFFORDABILITY AND RESILIENCE

Wafa Jafri, partner and lead for energy and natural resources strategy at KPMG UK and part of the team that developed the offshore wind Contracts for Difference (CfD) mechanism, said she expects to see more caution in AR8.

“AR7 was ultimately about restoring momentum and scale to the offshore wind market, but AR8 feels different. I think what we’re likely to see more of is caution in AR8. The market is now entering the auction against a backdrop of geopolitical instability, supply chain pressure and renewed focus on affordability and resilience.

“Auctions alone don’t deliver jobs; manufacturing investment, ports, vessels and supply chain certainty do. The real question for AR7 and AR8 is whether the UK can translate deployment ambition into durable industrial investment.

“Government ambition remains strong, but developers and investors will be much more focused on execution risk than they were even 12 months ago,” Wafa continued.

Wafa Jafri, partner and lead for energy and natural resources strategy at KPMG UK (Image: KPMG UK)

“The market is now asking harder questions around cost inflation, financing conditions, supply chain exposure and delivery timelines. That does not mean ambition disappears in AR8 – but it does mean the market will place greater emphasis on deliverability and resilience.

“Affordability is increasingly becoming a resilience issue. With increasing pressure on cost, the UK will struggle to separate energy security from the cost burden ultimately carried by households and industry. That will place greater pressure on governments and developers alike to demonstrate not only that projects can be built, but that they can be delivered at a cost the system can absorb.

“The industry has discussed supply chain investment for years. AR7 and AR8 now become a test of whether the UK can genuinely convert deployment ambition into manufacturing capability, port infrastructure and domestic industrial capacity.”

Wafa believes that the current crisis could be an opportunity to bring offshore costs down. Despite challenges, including uncertainty and the price of steel, the UK could deliver investment and build factories. But action around........

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