No Offshore Wind Capacity Awarded at Latest U.K. Auctions; Orsted, RWE, and SSE Are Cheap

At round 5 of the U.K. contract-for-difference auctions on Sept. 8, 3.7 gigawatts of renewable capacity were awarded, one third of the amount awarded last year—1.9 GW was solar and 1.5 GW was onshore wind. No offshore wind capacity was cleared. This a blow to the U.K. goal to grow offshore wind capacity to 50 GW by 2030 from 14 GW currently. Still, no surprise here as many developers had warned that the ceiling strike price of GBP 44/MWh in 2012 prices of these auctions was way too low given the 40% increase in construction costs over the last year. Overall, the absence of awarded capacity reflects price discipline from developers.