Consultation outcome

Contracts for Difference: contract changes for Allocation Round 5

From:
Department for Energy Security and Net Zero and Department for Business, Energy & Industrial Strategy
Published
19 December 2022
Last updated
16 March 2023 — See all updates
This was published under the 2022 to 2024 Sunak Conservative government

Applies to England, Scotland and Wales

This consultation has concluded

Read the full outcome

Consultation on drafting amendments to the CfD contract for Allocation Round 5: government response

PDF, 242 KB, 17 pages

This file may not be suitable for users of assistive technology.

Request an accessible format.
If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email alt.formats@beis.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Contracts for Difference Allocation Round 5 Annex: final stage assessment

PDF, 191 KB, 7 pages

This file may not be suitable for users of assistive technology.

Request an accessible format.
If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email alt.formats@beis.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Detail of outcome

The government response confirms our decision to make several amendments to the CfD Standard Terms and Conditions and Private Network Agreement (the contract) for the fifth CfD Allocation Round (AR5).

The amendments to the contract include changes to prevent generators delaying their CfD Start Date for commercial gain, while retaining flexibility to accommodate genuine construction delays.

The government’s final assessment of the likely economic impact of these contract changes is published as an annex to the government response.

We have also updated the interest rate methodology for repaying cumulated Subsidy, following the UK’s exit from the EU, and removed BSUoS (Balancing Services Use of System) charge clauses, reflecting Ofgem’s 2022 decision that these charges will no longer be levied on generators. We have simplified data provision requirements for generators, and updated definitions in the CfD Private Network Agreement to ensure better alignment with regulations. In addition, we have updated the contract to reflect new supply chain plan requirements for floating offshore wind projects.

Detail of feedback received

We received 28 responses to this consultation, as follows:

  • developers of renewable generating stations - 19
  • trade associations - 5
  • supply chain company – 1
  • consumer group – 1
  • investment fund manager – 1
  • electricity supplier – 1

Original consultation

Summary

We're seeking views on the proposed contract changes for the fifth allocation round of the Contracts for Difference scheme.

This consultation ran from
to

Consultation description

This consultation seeks views on drafting changes to the Contracts for Difference (CfD) Standard Terms and Conditions and Private Network Agreement in advance of Allocation Round 5 (AR5), which is scheduled to open in March 2023. The proposed changes will:

  • clarify that the flexibility in the contract for generators to delay their CfD start date should not be used to optimise electricity generation revenue prior to starting the CfD contract
  • simplify data provision requirements for generators
  • update definitions in the CFD Private Network Agreement to ensure better alignment with regulations
  • update interest rate calculations for repaying cumulated subsidy following the UK’s exit from the EU
  • remove BSUoS (Balancing Services Use of System) charge clauses, reflecting Ofgem’s decision that these charges will no longer be levied on generators
  • reflect new supply chain plan requirements for floating offshore wind projects

The proposed drafting changes are shown as tracked amendments in the CfD Standard Terms and Conditions and CfD Private Network Agreement, published alongside this consultation document.

We welcome responses from anyone with an interest in the proposals, in particular those considering participating in AR5.

Read the BEIS consultation privacy notice.

Documents

Consultation on drafting amendments to the CfD contract for Allocation Round 5

PDF, 244 KB, 19 pages

DRAFT: AR5 Standard Terms and Conditions

PDF, 10.1 MB, 561 pages

This file may not be suitable for users of assistive technology.

Request an accessible format.
If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email alt.formats@beis.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

DRAFT: AR5 Private Network Agreement

PDF, 2.78 MB, 132 pages

This file may not be suitable for users of assistive technology.

Request an accessible format.
If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email alt.formats@beis.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Updates to this page

Published 19 December 2022
Last updated 16 March 2023 + show all updates

  1. Government response and impact assessment published.

  2. First published.

Sign up for emails or print this page

Related content