Solar Wins Big In UK’s Allocation Round 5

• UK has awarded a total of 3.7 GW new renewable energy capacity for AR5 auction round  
• With 1.92 GW, solar PV emerged the largest winner while onshore wind secured nearly 1.4 GW  
• There were no bids for offshore wind for which the government blames global rise in inflation and the impact on supply chains 
• Allocation round 6 is expected to be launched in March 2024, according to the indicative timeline released  

Solar PV technology is the largest winner of the contracts for difference (CfD) funding under United Kingdom's (UK) Allocation Round 5 (AR5), whereas offshore wind got nothing. Of the total 3.697 GW total awarded renewable energy capacity by the Department for Energy Security and Net Zero in the form of 95 projects, solar's share was 1.927 GW.  

Winning PV capacity of more than 5 MW projects will need to be put in production as 393.96 MW in 2025-26, 150.74 MW in 2026-27, and 1,382.98 MW in 2027-28. The winning strike price of solar was £47 ($58.6)/MWh, the same as determined under the tender for all the years.  

In comparison, onshore wind ended up with 1.48 GW in total for a strike price of £52.29/MWh for all 3 years, down from £53 ($66)/MWh strike price in the tender (see UK's CfD Allocation Round 5 Open).   

The Department for Energy Security and Net Zero also selected 223.6 MW remote island wind (RIW), 53.04 MW tidal stream and 12 MW geothermal capacity in this round. The list of winning projects is available here.        

Regarding offshore and floating offshore wind for which there were no winning projects, the Energy and Climate Change Minister Graham Stuart said the trend is in line with similar results in countries like Germany and Spain. He blamed the lack of interest in this category to the global rise in inflation and the impact on supply chains.   

"Offshore wind is central to our ambitions to decarbonize our electricity supply and our ambition to build 50 GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm," added Stuart.  

Offshore wind won the lion's share of 7 GW in AR4 while solar PV was the second last with 2.2 GW (see UK's CfD Round 4 Secures 'Almost' 11 GW RE).  

Total budget of this round was recently increased to £227 million with pot 1, that includes solar, getting £190 million of the lot (see £22 Million More For UK's Renewables Auction).  

According to the indicative timeline of AR6 round, the 2nd annual auction for the country, draft allocation framework can be expected in mid-November 2023. Application window will open on March 27, 2024 and winners declared in September 2024.