Politics Home Article | Offshore wind auction sends a clear signal for supply chain

It’s always a challenge keeping good news a secret in Westminster and Whitehall. An underwhelmed air hung over the latest Allocation Round as the pot 3 budget for offshore wind, announced in October set at £900m, was forecast to deliver far fewer gigawatts than required to neither put a spring back in the step of industry nor make government deployment targets for 2030 a likely reality.

So with the announcement on 14^th January 2026 that a staggering 8.44 GW of offshore wind projects were granted Contracts for Difference (CfDs), enabled by an enhanced budget of almost £1.8bn, the biggest surprise was that the government had actually managed to keep this a secret until the very last minute.

The success of the auction is not just in big numbers though. Crucial floating offshore wind projects in the Celtic Sea (Erebus) and North Sea (Pentland) were awarded CfDs, and at a strike price 10 per cent lower than the administrative strike price for AR7. This gives much needed answers to geographic questions about floating offshore wind deployment. This is combined with large procurement of fixed offshore wind capacity in key regions in Scotland, North East England and East Anglia.

All in all, this bumper allocation round provides a strong signal to offshore wind developers, manufacturers and supply chain companies up and down the country that this government doesn’t just back offshore wind, but is committing it right to the heart of the future energy system. We’ve heard similar rhetoric from previous governments without such follow through, so this is a welcome message, strongly conveyed. Indeed, the decision to extend the budget would presumably have gone through both HM Treasury and No10 for sign off, indicating that this industry has support right from the top of the Labour Administration.

Now that colours are firmly nailed to the offshore wind mast (or should that be turbine), attention must turn to getting the supply chain match-fit to deliver on getting them built. With 8.4GW to deliver, the supply chain can comfortably invest; to quote a colleague, “There are many companies looking to establish themselves into offshore wind, and with this scale of opportunity on the horizon, it’s easier for investors to get on board”. With clearing prices around £90/MWh, UK companies should be able to compete with cheaper imports that have geopolitical risk attached. It should also provide a signal to foreign direct investment that while other markets might be increasingly unstable or too nascent to justify the risk, the UK is open for offshore wind business and a key location for manufacturing.

We must focus on the core technologies highlighted with the Industrial Growth Plan, ensuring that the UK plays to our strengths in turbine blades, cables, substructures and operations and maintenance. Attention must turn to efficiency and innovation; how can we get consents delivered faster, manufacturing times reduced and operational costs down in the long term. Use of drones, UAVs, continuous at sea sensors and predictive AI modelling have a role to play in this process. The UK has a wealth of expertise, academic throughput and innovation credentials; harnessing them can provide an economic boom that supercharges the industry and delivers on the job creation and regional economic growth that this government has deemed among its highest priorities.

The late 2020s now hold significant potential for growth of the offshore wind sector in the UK, which is complemented by the developing international market for these technologies. If the UK leverages this boom correctly, we can lead the way on technology, standardisation and regulation. If the government plays this right, we will have a multigenerational industry that rivals the domestic aerospace and automotive sectors in terms of regional, national and international significance.