AR7: Can the Auction Model Still Deliver Clean Power at Pace?

Allocation Round 7 delivered a significant new pipeline of renewable energy capacity and helped restore confidence in the UK market. In this Strategic Summit session, developers, investors, engineers and industry representatives assess the results of AR7 and consider whether the Contracts for Difference auction model can continue to support clean power deployment at the speed and scale required.

The panel is broadly supportive of the CfD mechanism. Its two-way price structure has provided long-term revenue certainty, attracted investment and become an international reference point for renewable energy auctions. Changes introduced for AR7, including longer contract terms and greater visibility for government during the bidding process, were seen as helping to improve project bankability and increase the volume of offshore wind capacity awarded.

However, a successful auction does not guarantee that projects will reach construction. The discussion highlights the difference between procuring capacity and delivering it. Projects must still secure planning consent, grid connections, supply chain contracts and final investment approval, often while facing changing interest rates, inflation and political uncertainty. Allowing some projects without consent to participate in AR7 may have increased competition, but it also created questions about whether all awarded capacity can be delivered within the required timeframe.

Grid connections and transmission charging emerge as the most immediate barriers. Projects across the UK are waiting for revised connection offers, while renewable developments in Scotland face particularly high and volatile Transmission Network Use of System charges. Panellists argue that costs which can rise substantially after a project has secured its CfD are difficult to manage and can undermine investment decisions. Without faster grid delivery and a more predictable charging regime, further auction success may not translate into operational generation.

The conversation also considers how the scheme may need to evolve. Speakers discuss aligning CfD timelines with connections reform, improving the treatment of onshore wind, providing clearer routes to market for floating offshore wind and recognising differences between technologies at different stages of maturity. While the CfD could play a role within the UK’s future strategically planned energy system, several panellists caution against using an auction held late in the development process as the main tool for influencing where projects are located.

Supply chain development is another important theme. The Clean Industry Bonus is welcomed as a step towards attracting domestic investment, but the panel argues that it must form part of a wider industrial strategy covering ports, manufacturing, skills and public finance. This is particularly important for floating offshore wind, where the UK has an opportunity to transfer engineering expertise from oil and gas and establish a competitive export industry.

The session explores

• The results of Allocation Round 7 and the performance of the CfD model
• The difference between awarding renewable capacity and delivering projects
• Grid connections, transmission charging and investment risk
• Consenting requirements and project bankability
• Future reforms for onshore, fixed and floating offshore wind
• The Clean Industry Bonus and UK supply chain investment
• Aligning auctions, infrastructure and strategic energy planning

Watch the full session to hear industry leaders discuss why the Contracts for Difference model remains a strong foundation for renewable investment, and what must change across grid policy, market design and infrastructure delivery to ensure future auction rounds result in projects being built at pace.

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