Offshore wind auctions: NESO’s role in running the CfD regime

Energy Markets 16 Jan 2026 - 2 minute read
Wind turbine in the sea

Britain is on a journey to cut bills and meet growing energy demand. A significant part of this is the huge task of building a sufficient renewable energy network. As part of the Clean Power 2030 Plan, the Contract for Difference (CfD) Scheme is a lever to procure and develop enough offshore wind to meet the government’s 2030 targets.

Established in 2014, CfD incentivises new low carbon, electricity generating projects in Great Britain by providing long term contracts and guaranteed prices to developers. It also aims to protect consumers from high bills, as generators pay consumers back when the market price exceeds the guaranteed contract prices.

NESO was appointed the CfD Delivery Body during the first Allocation Round in 2014, and since then we have successfully delivered seven Allocation Rounds in total. We are responsible for managing and operating the front end of the process of the CfD scheme. This includes facilitating company registration, assessing the eligibility of applications, conducting reviews for non-qualification, and running the auction. We then hand over the auction results to Low Carbon Contract Company (LCCC) who enter and manage CfD Agreements and payments.

Allocation Round 7 Results

Allocation Round 7 (AR7) opened for applications on August 7 2025 and the auction concluded in early January 2026. On Wednesday 14 January, government announced the AR7 results a total of 8.4 GW of fixed bottom and floating offshore wind had been procured. This makes AR7 the biggest ever offshore wind capacity procurement. That’s enough clean energy to power the equivalent of 12 million homes, helping to put the country on track to meet the clean power target of 12GW of additional offshore wind capacity by 2030.

Notably, the clearing prices for the auction were well below the Administrative Strike Price (ASP) (the maximum price set by government can be awarded) which reduced the impact on consumer bills. All successful projects will be awarded a 20 year CfD Agreement and are expected to be operational by March 2031. 

Next Steps for NESO

We continue to finalise the auction for Pots 1 and 2 (all remaining technologies including Solar, tidal steam and onshore wind), with results for this second auction due to be published by 9 February.