Proposed refinements for Allocation Round 8 and future rounds

Overview

This consultation seeks views on proposed refinements to the Contracts for Difference (CfD) contract terms in advance of Allocation Round 8 (AR8). The proposals in this consultation cover a range of areas, including:

• Policy on surrendered CfD capacity – making permanent the restriction on bidding previously surrendered capacity into future rounds to protect auction integrity and deployment timelines.
• Hybrid metering for single technology/multiple commercial arrangements – enabling CfD and merchant assets of the same technology to share metering infrastructure, reducing costs.
• Contractual changes for floating offshore wind (FLOW) – extending the Longstop Period and reducing the Required Installed Capacity threshold to reflect the scale and complexity of future projects.
• Introducing a new technology category for Other Deepwater Offshore Wind (ODOW) – enabling innovative foundation designs for deepwater sites to compete for CfD support.
• Changes to improve scheme efficiency – proposed legislative amendments to allow the National Energy System Operator (NESO) to correct errors made during the assessment of CfD applications and consider new documentary evidence to clarify non-material errors and omissions in applications, and minor adjustments to improve administration of the pending applications process.
• Strengthening Unilateral Commercial Operations Notice (UCON) provisions – improving metering access and enforcement to prevent distribution-connected generators from delaying CfD start dates and operating on a merchant basis at elevated wholesale prices.
• Excluding applications with Gate 1 connection offers – aligning CfD eligibility with grid connection reforms to prioritise projects with firm connection dates.
• Visibility of sealed bids – changing our approach on the ability of the Secretary of State to see bids for AR8.
• Minor and Technical changes to the CfD contract terms to update the CPI inflation factor and amend the definition of Inside Information.
• In addition, to provide a policy update on fixing the appeals timeline.

Together, these refinements are designed to maintain investor confidence, support timely delivery of renewable capacity, and ensure the CfD remains fit for purpose as projects scale up in size and complexity.

The Government welcomes responses from anyone with an interest in the proposals. We envisage that the consultation will be of particular interest to those considering participating in AR8 and future rounds. Existing CfD generators may be interested in some of the proposals in this document.

Please use the link below to submit your responses.