Scottish Power has warned that “full-scale” offshore wind farms capable of contributing to the government’s 2030 clean electricity target have missed out on subsidy deals for earlier-stage projects that may not be built on time or at all.
The dispute centers on the most recent 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 economic viability of large renewable projects.
Scottish Power had hoped to secure backing for its £4bn East Anglia One North offshore wind farm off the Suffolk coast. The project is fully approved and could power up to 900,000 homes, according to the company. However, the company was unable to win a contract and had to compete against six other offshore wind projects.
Scottish Power chief executive Keith Anderson said the outcome was particularly frustrating as his company could have made a final investment decision straight away.
“We literally had a shovel-ready project,” Anderson said. “We would have made a final investment decision the day after the contract was awarded. Construction would have started immediately and the project would have been in full production before the end of 2030.”
Instead, winning projects include projects that are at an earlier stage of development. Two of the six companies do not yet have planning permission and several have not yet entered into supply chain agreements.
Five of the successful bids were led by German energy company RWE. RWE acknowledged earlier this year that not all of its AR7 projects are expected to be operational by 2030, the government’s deadline for achieving 95 percent clean electricity generation.
Anderson said the rule changes introduced for AR7, which allowed projects to submit bids before receiving planning permission and before entering into supply chain contracts, increased the risk of non-delivery.
“In the past we have seen speculative bids,” he said, pointing to previous offshore programs that secured contracts but were later withdrawn when rising costs made them uneconomic.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.
There are concerns that early-stage projects could experience similar cost overruns or scheduling delays, jeopardizing the government’s clean energy timeline.
RWE defended its position on the grounds that the planning approvals for its outstanding projects are “well advanced” and that negotiations with suppliers are progressing. The company remains confident that the AR7 portfolio can be delivered subject to timely network connections.
The Department for Energy Security and Net Zero said the auction results were “firmly on track to take back control by delivering clean, self-generated electricity by 2030”, stressing that the CfD process continues to drive large-scale investment in offshore wind.
The dispute highlights a broader tension within the UK’s energy transition strategy: whether auction rules should prioritize immediate construction readiness or maximize competition by including projects in earlier stages of development.
For Scottish Power, the message to ministers is clear. Anderson said the company was now urging the government to expedite the next round of CfD auctions this year. “We can complete this project by 2030,” he said. “It will make a significant contribution 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 convert auction profits into steel in the water is coming under increasing scrutiny from industry and investors alike.
