The UK Gov: Funding Renewable Wind Energy to Meet Net Zero

According to the Crown Estate, to date, the UK has 45 wind farms and generates roughly 47.6TwH per year.

The Crown Estate’s data also shows that 30.6% of the UKs electricity is currently being generated by offshore wind.

Wind and offshore wind power is a key player in the race to meet net zero by 2050, which is why the UK Government is announcing a budget for offshore wind.

What are AR7 funds?

The Department for Energy Security and Net Zero has issued the Contracts for Difference (CfD) Contract Budget Notice for Allocation Round 7 (AR7), covering Offshore Wind (Pot 3) and Floating Offshore Wind (Pot 4). 

The application window for this round opened on 7 August 2025. 

The overall monetary budget is set in 2024 prices at £1.08bn (US$1.44bn) for each of the years 2028/29 to 2031/32, then £900m (US$1.2bn) for 2032/33. 

Pot 3 receives £900m (US$1.2bn) each year from 2028/29 to 2032/33. 

Pot 4 receives £180m (US$240m) a year from 2028/29 to 2031/32 with no budget in 2032/33. 

The fund has a two capacity maxima, each set at 30 GW, that apply as hard constraints: one for Offshore Wind Scotland projects and one for other Offshore Wind projects in Pot 3. 

The notice specifies these are purely technical to separate clearing prices while awarding in merit order.

Administrative Strike Prices for this round are £113/MWh (US$150/MWh) for Offshore Wind and £271/MWh (US$360/MWh) for Floating Offshore Wind.

Budgets are rebased to a 2024 price level. 

The notice is signed by Sarah Redwood, Director, Renewable Electricity, for and on behalf of the Secretary of State.

Clean industry bonus

A separate Final Budget Notice confirms the Clean Industry Bonus (CIB) for AR7. 

The budget is £20.1m (US$26.7m) per GW of capacity applying for a CIB, totalling over £544m (US$724m). 

A ring-fenced monetary sub-budget is reserved for Floating Offshore Wind proposals to support the more expensive nascent floating supply chain. 

“This is a moment to show how cleaner power can also be cheaper power,” writes Chris Stark, Head of UK’s Mission for Clean Power, UK Government’s Department for Energy Security and Net Zero, on LinkedIn.

“The period ahead is exciting, our first opportunity to calibrate the impact of the changes we've implemented.”

The UK’s net zero journey 

In August 2025, The UK Government released ‘The UK’s Plans and Progress to Reach Net Zero by 2050’.

UK territorial emissions in 2024 were 50.4% below 1990 levels, meaning the UK met its third carbon budget, with most historic gains driven by decarbonising electricity and the closure of the last coal station.

More recent progress has come from surface transport, where EV sales recovered in 2024 and public charge points rose by almost 40%.

Heat pump installations increased by 56% in 2024, yet the Climate Change Committee (CCC) still counts 39% of the reductions needed for 2030 as at significant risk, with buildings policy lagging and agriculture showing little sustained emissions decline.

Aviation now contributes a larger share of emissions than the entire electricity supply sector, underlining the CCC’s view that net zero remains “within reach” only if urgent action continues across critical areas. 

Together these notices and sustainable progress provide support to strengthen UK floating offshore wind supply chains and the journey to net zero.

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