Proposed amendments to Contracts for Difference for Allocation Round 7 and future rounds
Applies to England, Scotland and Wales
Read the full outcome
Detail of outcome
The government response confirms our decision on implementing the following amendments to the scheme ahead of Allocation Round 7:
- repowering: to ensure repowered onshore wind projects that meet the eligibility criteria can bid into the CfD from AR7
- phased CfDs for floating offshore wind (FLOW): to extend the phased CfD policy currently available for fixed-based offshore wind (OFW) projects to FLOW projects
It also confirms the outcomes of a range of policy considerations for future rounds beyond Allocation Round 7, including:
- appeals: to not pursue the introduction of a pre-qualification process ahead of the next allocation round, nor to amend the grounds for appeal, but to take forward work to implement a fixed timeline for future rounds
- hybrid metering: to not implement hybrid metering in the CfD before it is clear how such assets would be treated in the wider system. Therefore, hybrid metering will not be implemented for the next allocation round, and the need for future amendments will be considered in light of any wider market changes that are brought forward in this area
- floating offshore wind (FLOW) definition: to continue to work with stakeholders with a view to developing a long-term solution to the eligible definition of floating offshore wind projects
- facilitating coordinated infrastructure: to continue to consider how the CfD could better support projects that connect into multi-purpose interconnectors/or bootstrap infrastructure
- indexation: full CfD indexation to CPI continues to offer comparatively advantageous terms in an increasingly competitive global market. The government therefore does not currently intend to make any changes to this approach but will reflect further on alternative approaches and priorities ahead of future allocation rounds
We will consult on any changes for future rounds ahead of each round where appropriate.
Detail of feedback received
We received 72 responses to the consultation from a wide range of stakeholders, including:
- renewable electricity developers and associated supply chain firms
- trade associations
- suppliers
- not-for-profit and public campaign groups
- investment bodies
Original consultation
Consultation description
Update: 7 March 2024
We published the Contracts for Difference Allocation Round 6 (AR6) statutory notices yesterday, which was earlier in the month than previous years.
As a result, we are extending the deadline for responses to this consultation to 11:59pm on Monday 11 March. However responses should remain specific to the material in the consultation, rather than reflecting views on the AR6 statutory notices.
The Contracts for Difference (CfD) scheme is the government’s main support mechanism for new low carbon electricity generation projects in Great Britain. We review the scheme continuously to ensure it remains fit for purpose as our electricity system evolves and we work towards our net zero ambitions.
This consultation invites views on changes that would, if implemented, apply to contracts awarded in future allocation rounds. It includes:
- proposals that would be delivered in time for Allocation Round 7 (AR7 - scheduled to open in 2025)
- longer-term considerations on which we would like early views
AR7 proposals
- enabling repowering projects to apply for the CfD in AR7 in limited circumstances, for onshore wind projects
- expanding the phased CfD policy to floating offshore wind projects
- streamlining the appeals process for annual auction rounds
- introducing changes to metering to better enable CfD generators to co-locate with other assets
Considerations for future allocation rounds
- how could the CfD support innovation in floating offshore wind foundation technology as the sector develops?
- how could the CfD support the delivery of improved coordination of offshore transmission infrastructure?
- should CfD indexation be updated to better reflect inflation risks?
We welcome responses from anyone with an interest in the policy area, but the consultation will be of particular interest to:
- those considering developing new renewable energy projects in Great Britain
- businesses involved in low carbon electricity generation supply chains
- electricity traders and suppliers
- businesses operating in the floating offshore wind sector
- consumer and environmental groups with an interest in the electricity sector
Read our consultation privacy notice.
Documents
Updates to this page
Last updated 18 October 2024 + show all updates
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The government response to this consultation has been published.
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Deadline extended to 11 March 2024 (from 7 March).
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First published.