Consultation on policy considerations for future rounds of the Contracts for Difference scheme

Overview

Contracts for Difference (CfD) scheme is government’s main support mechanism for new low-carbon electricity generation projects in Great Britain. The government continuously reviews the CfD scheme to ensure it remains fit-for-purpose as our electricity system evolves and we work towards our net zero ambitions.

This consultation is inviting views on potential changes for Allocation Round 6 (AR6) (due to open in 2024) and future rounds beyond AR6, as well as providing several policy updates.

These include:

• a proposal to make electricity supplied by private wire to offshore oil and gas facilities ineligible for CfD payments;

• requests for views to inform whether:
  • the definition of floating offshore wind should be amended to reflect the evolving nature of this new and emerging technology;
  • offshore wind farms connected to a multi-purpose interconnector should be eligible to apply for a CfD and how this could be enabled;
  • phasing policy should be retained for fixed-bottom offshore wind projects;
  • the current CfD appeals process remains appropriate in line with annual auctions;
  • the CfD is an appropriate mechanism to support repowered projects and questions around how this could be facilitated
• policy updates in relation to maintaining the balance between market exposure and investor certainty for CfD holders, the interaction between the CfD scheme and Capacity Mechanism on matters of eligibility and the potential consideration of whether other factors beyond price should be taken into account in contract awards.

We welcome responses from anyone with an interest in the proposals, including those considering participating in AR6 and future CfD rounds.

Read the consultation document on GOV.UK.