UK reveals strike price caps for next green auction with Scottish surprise

The UK government has revealed the strike price caps for its pivotal upcoming Contracts for Difference (CfD) renewable energy auction.

The government announced yesterday the newly raised Administrative Strike Prices (ASP) for this year’s auction round, AR7.

The new ASP – the maximum price the government is willing to pay for power from a given technology – has for fixed-bottom offshore wind been raised to £113/MWh ($153/MWh), up from £102/MWh last year, based on 2024 prices.

For floating wind the cap is £271/MWh, up from £245/MWh in last year’s edition. Onshore wind sees its strike price pushed up to £92/MWh, up from £89/MWh last year.

In 2012 prices, which are used as a reference point, the new prices equate to: £81/MWh for offshore wind; £194/MWh for floating wind and £66/MWh for onshore wind.

Fixed bottom and floating offshore wind will each have their own dedicated pots and run in a separate stream this year. They will also be notified of the results from their round slightly later than for onshore technologies.

And while the government has recently ruled out moving to a zonal power price system, there will for the first time be a zonal split in how fixed bottom offshore wind projects are assessed.

In Pot 3, for fixed bottom offshore wind, the government said that “Maxima will be applied to separate the clearing prices” of offshore wind projects in Scotland and other offshore wind projects.

Writing on LinkedIn, John MacAskill, group growth director at consultancy OWL, described this as a “structural kludge to deal with the distortion” of transmission charges, “which continue to punish Scottish projects by £7–9/MWh, often more.”

“Fixed projects in Scotland will be assessed separately, potentially with their own pot, ASP, or budget cap.”

The application window for the upcoming auction round will launch on 7 August.