Scottish Power has warned that “shovel-ready” offshore wind farms capable of contributing to the government’s 2030 clean power target have missed out on subsidy contracts to earlier-stage schemes that may not be built in time, or at all.
The row centres on the latest Contracts for Difference (CfD) subsidy auction, Allocation Round 7 (AR7), the results of which were published in January. CfDs guarantee developers a fixed price for the electricity they generate, underpinning the economics of large-scale renewable projects.
Scottish Power had hoped to secure backing for its £4 billion East Anglia One North offshore wind farm off the Suffolk coast. The project is fully consented and, according to the company, could power up to 900,000 homes. However, it failed to win a contract, losing out to six other offshore wind proposals.
Keith Anderson, chief executive of Scottish Power, said the outcome was particularly frustrating because his company could have moved immediately to a final investment decision.
“We had literally a shovel-ready project,” Anderson said. “We would have taken a final investment decision the day after being awarded the contract. Construction would have started immediately and the project would have been at full output before the end of 2030.”
Instead, the winning projects include schemes that are at earlier stages of development. Two of the six do not yet have planning consent, and several have not finalised supply chain agreements.
Five of the successful bids were led by RWE, the German energy group. RWE acknowledged earlier this year that not all of its AR7 projects were likely to be operational by 2030, the government’s deadline for achieving 95 per cent clean electricity generation.
Anderson said the rule changes introduced for AR7, which allowed projects to bid before receiving planning consent and before locking in supply chain contracts, increased the risk of non-delivery.
“In the past, we’ve seen speculative bids,” he said, referencing previous offshore schemes that secured contracts but were later withdrawn when rising costs made them uneconomic. Inflation and supply chain pressures have previously forced developers to return CfD contracts rather than proceed at a loss.
The concern is that early-stage projects could encounter similar cost overruns or planning delays, undermining the government’s clean power timetable.
RWE defended its position, stating that planning approvals for its outstanding projects were “well advanced” and that negotiations with suppliers were progressing. It said it remained confident that, subject to timely grid connections, its AR7 portfolio would be delivered.
The Department for Energy Security and Net Zero said the auction results “put us firmly on track to take back control by delivering clean, home-grown power by 2030”, maintaining that the CfD process continues to drive investment into offshore wind at scale.
The dispute highlights a broader tension within the UK’s energy transition strategy: whether auction rules should prioritise immediate build-readiness or maximise competition by including projects at earlier stages of development.
For Scottish Power, the message to ministers is clear. Anderson said the company is now pressing the government to proceed swiftly with the next CfD auction round this year. “We can still get this project built by 2030,” he said. “It will contribute meaningfully to your net-zero target, but it needs certainty.”
As the race to meet the 2030 target intensifies, the credibility of the subsidy system, and its ability to translate auction wins into steel in the water, is likely to face increasing scrutiny from industry and investors alike.
