LONDON--(BUSINESS WIRE)--Jan 15, 2026--
The UK’s latest Contracts for Difference (CfD) Allocation Round results confirm a major step forward for clean electricity buildout, while also highlighting a simple truth about power system economics: as wind and solar scale, flexible, dispatchable capacity becomes more valuable and, done well, cheaper for consumers than the alternatives.
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The Department for Energy Security and Net Zero (DESNZ) published Allocation Round 7 (AR7) results on 14 January 2026, awarding a record 8.4375GW of offshore wind projects. Clearing strike prices (in 2024 prices) were £91.20/MWh for offshore wind (fixed-bottom), £89.49/MWh for offshore wind projects in Scotland, and £216.49/MWh for floating offshore wind.
“These outcomes show the UK is serious about building clean power at scale,” said Zach Dodds-Brown, Development Director at Terra Firma Energy. “But they also reinforce why the transition must be built on two pillars: abundant low-carbon energy and dependable flexibility that can respond in minutes and run when the weather doesn’t cooperate.”
Why higher wind clearing prices make flexibility even more important
AR7’s higher clearing prices reflect well-documented inflation and supply chain pressures across offshore wind. The UK now has a larger volume of renewables coming online at fixed, index-linked contract prices and that makes the system costs around intermittency, constraints and balancing increasingly material.
The National Energy System Operator (NESO) has been explicit that balancing costs are driven by the changing generation mix and network constraints as the system decarbonises, and it has identified major consumer savings through market and operational reforms.
Meanwhile, UK government analysis has highlighted the scale of potential savings from flexibility: the Statutory Security of Supply Report 2025 notes that flexibility (alongside storage and interconnection) could save up to £10bn per year (2012 prices) by 2050 by reducing how much generation and network build is needed.
Flexible generation: a critical asset class for a low-cost transition
Flexible generation (often called “flexgen”), fast-start, high-ramp plants that operate at low load factors and respond to peaks and system needs, is a core tool for keeping the system reliable without overbuilding expensive assets.
NESO’s Clean Power 2030 analysis has stated that gas-fired generation capacity remains essential for security of supply until sufficient low-carbon equivalents are built. In other words: flexibility is not a “nice to have”; it’s part of the engineering reality of a weather-dependent grid.
“When flexibility is absent, the system pays anyway, through higher constraint costs, inefficient redispatch and increased balancing actions,” Zach added. “Well-located, well-operated flexible generation reduces the amount of ‘backup’ the system must carry, supports renewable integration, and lowers the total cost to consumers.”
Recent reforms and policy discussions also recognise that cutting constraint and balancing costs is a consumer priority. Reuters has reported that network and market upgrades could save up to £4bn in constraint payments by 2030, citing NESO.
About Terra Firma Energy
Terra Firma Energy constructs, owns and operates flexible power generation plants across the UK. With three operational sites and additional sites under construction totalling 116MW, the company is expanding through development and acquisition to support the UK's transition to a resilient, flexible, low-carbon energy system.
Flexible Generation is essential in keeping the UK's energy system reliable without overbuilding other more expensive assets. NESO’s Clean Power 2030 analysis has stated that gas-fired generation capacity remains essential for security of supply. Terra Firma Energy's 5MW flexible power generating plant in Droitwich Spa, UK along with their other operational sites play a major part in providing the UK with such security.
Terra Firma Energy believe the UK's energy transition must be built on two pillars: abundant low-carbon energy and dependable flexibility that can respond in minutes and run when the weather doesn’t cooperate.
WASHINGTON (AP) — A bipartisan group of lawmakers have proposed creating a new agency with $2.5 billion to spur production of rare earths and the other critical minerals, while the Trump administration has already taken aggressive actions to break China's grip on the market for these materials that are crucial to high-tech products, including cellphones, electric vehicles, jet fighters and missiles.
It’s too early to tell how the bill, if passed, could align with the White House’s policy, but whatever the approach, the U.S. is in a crunch to drastically reduce its reliance on China, after Beijing used its dominance of the critical minerals market to gain leverage in the trade war with Washington. President Donald Trump and Chinese President Xi Jinping agreed to a one-year truce in October, by which Beijing would continue to export critical minerals while the U.S. would ease its export controls of U.S. technology on China.
The Pentagon has shelled out nearly $5 billion over the past year to help ensure its access to the materials after the trade war laid bare just how beholden the U.S. is to China, which processes more than 90% of the world's critical minerals. To break Beijing's chokehold, the U.S. government is taking equity stakes in a handful of critical mineral companies and in some cases guaranteeing the price of some commodities using an approach that seems more likely to come out of China's playbook instead of a Republican administration.
The bill that Sen. Jeanne Shaheen, D-N.H., and Sen. Todd Young, R-Ind., introduced Thursday would favor a more market-based approach by setting up the independent body charged with building a stockpile of critical minerals and related products, stabilizing prices, and encouraging domestic and allied production to help ensure stable supply not only for the military but also the broader economy and manufacturers.
Shaheen called the legislation “a historic investment” to make the U.S. economy more resilient against China’s dominance that she said has left the U.S. vulnerable to economic coercion. Young said creating the new reserve is “a much-needed, aggressive step to protect our national and economic security.”
Rep. Rob Wittman, R.-Va., introduced the House version of the bill.
When Trump imposed widespread tariffs last spring, Beijing fought back not only with tit-for-tat tariffs but severe restrictions on the export of critical minerals, forcing Washington to back down and eventually agree to the truce when the leaders met in South Korea.
On Monday, in his speech at SpaceX, Defense Secretary Pete Hegseth revealed that the Pentagon has in the past five months alone “deployed over $4.5 billion in capital commitments” to close six critical minerals deals that will “help free the United States from market manipulation.”
One of the deals involves a $150 million of preferred equity by the Pentagon in Atlantic Alumina Co. to save the country's last alumina refinery and build its first large-scale gallium production facility in Louisiana.
Last year, the Pentagon announced it would buy $400 million of preferred stock in MP Materials, which owns the country's only operational rare earths mine at Mountain Pass, California, and entered into a $1.4-billion joint partnership with ReElement Technologies Corp. to build up a domestic supply chain for rare earth magnets.
On Wednesday, Trump announced in a proclamation that the U.S. is “too reliant” on foreign-sourced critical minerals and directed his administration to negotiate better deals. He said possible remedies would include minimum import prices for certain critical minerals.
“Reshoring manufacturing that’s critical to our national and economic security is a top priority for the Trump administration,” said Kush Desai, a White House spokesperson.
The drastic move by the U.S. government to take equity stakes has prompted some analysts to observe that Washington is pivoting to some form of state capitalism to compete with Beijing.
“Despite the dangers of political interference, the strategic logic is compelling,” wrote Elly Rostoum, a senior fellow at the Washington-based research institute Center for European Policy Analysis. She suggested that the new model could be “a prudent way for the U.S. to ensure strategic autonomy and industrial sovereignty.”
Companies across the industry are welcoming the intervention from Trump's administration.
“He is playing three-dimensional chess on critical minerals like no previous president has done. It's about time too, given the military and strategic vulnerability we face by having to import so many of these fundamental building blocks of technology and national defense,” NioCorp's Chief Communications Officer Jim Sims said. That company is trying to finish raising the money it needs to build a mine in southeast Nebraska.
In addition to trying to boost domestic production, the Trump administration has sought to secure some of these crucial elements through allies. In October, Trump signed an $8.5 billion agreement with Australia to invest in mining there, and the president is now aggressively trying to take over Greenland in the hope of being able to one day extract rare earths from there.
On Monday, finance ministers from the G7 nations huddled in Washington over their vulnerability in the critical mineral supply chains.
U.S. Treasury Secretary Scott Bessent, who has led several rounds of trade negotiations with Beijing, urged attendees to increase their supply chain resiliency and thanked them for their willingness to work together “toward decisive action and lasting solutions,” according to a Treasury statement.
The bill introduced on Thursday by Shaheen and Young would encourage production with both domestic and allied producers.
Congress in the past several years has pushed for legislation to protect the U.S. military and civilian industry from Beijing's chokehold. The issue became a pressing concern every time China turned to its proven tactics of either restricting the supply or turned to dumping extra critical minerals on the market to depress prices and drive any potential competitors out of business.
The Biden administration sought to increase demand for critical minerals domestically by pushing for more electric vehicle and windmill production. But the Trump administration largely eliminated the incentives for those products and instead chose to focus on increasing critical minerals production directly.
Most of those past efforts were on a much more limited scale than what the government has done in the past year, and they were largely abandoned after China relented and eased access to critical minerals.
Funk reported from Omaha, Nebraska. AP writer Konstantin Toropin contributed to the report.
FILE - NioCorp Chief Operating Officer Scott Honan tells a group of investors about the plans for a proposed mine during a tour of the site Oct. 6, 2021, near Elk Creek in southeast Nebraska. (AP Photo/Josh Funk, File)
FILE - President Donald Trump, left, and Chinese President Xi Jinping, right, shake hands before their meeting at Gimhae International Airport in Busan, South Korea, Oct. 30, 2025. (AP Photo/Mark Schiefelbein, File)
FILE - Workers use machinery to dig at a rare earth mine in Ganxian county in central China's Jiangxi province on Dec. 30, 2010. (Chinatopix via AP, File)
