Investing.com -- Bernstein analysts said the UK's AR8 offshore wind auction represents the most reliable large-scale opportunity in Europe, with potential to allocate 8-10 gigawatts of capacity. The firm identified RWE and SSE as primary beneficiaries, while Vestas stands to gain through turbine supply contracts.

The analysis noted that while over 22 gigawatts could theoretically participate in AR8, approximately 10 gigawatts appears genuinely ready for auction based on permitting maturity and project location advantages. The UK government's procurement target ranges from 8 to 15 gigawatts for AR8, though key parameters including budget, caps and reference prices remain undisclosed.

European auction frameworks are moving away from subsidy-free models toward risk-sharing structures, according to the firm. Denmark's re-run tender for 1.8 gigawatts introduces a capability-based two-sided contract for difference that addresses curtailment risk. The Netherlands is returning to subsidized structures through SDE++ and future two-sided contracts for difference, while France is adopting 25-year capability contracts for difference.

Bernstein expects Denmark's 1.8 gigawatt auction and the Netherlands' 2 gigawatt auction to attract heavy competition from offshore developers including Orsted, RWE, Vattenfall, Eneco, and potentially SSE and Ocean Winds, as well as infrastructure and pension funds. The firm anticipates reduced participation from oil majors due to their renewed focus on oil and gas operations.

Execution challenges continue to constrain progress in other markets. Belgium faces delays on a 700 megawatt auction, while France's 10 gigawatt auction faces extended permitting timelines with 8 to 10 years until commissioning. Germany's potential re-tendering of approximately 16.5 gigawatts requires prior auction winners including TotalEnergies, BP and EnBW to return sites and the government to introduce a two-sided contract for difference framework, a process expected to take at least several years.