Government Response to The Policy Proposals in The Consultation On Further Reforms to The CfD scheme for AR 7 Published

The Government’s response to the policy proposals in the consultation on further reforms to the Contracts for Difference (CfD) scheme for Allocation Round 7 (AR7) has been published. It outlines the UK government’s decisions and responses to stakeholder feedback on proposed changes to the CfD scheme, which is a key policy for incentivising low-carbon electricity in Great Britain.

“The reforms we are setting out today represent an important step forward for our mission. By securing investment in renewable energy at competitive prices, we will increase our energy independence, protect billpayers, create good jobs and drive growth around the country. “

The Summary of Decisions includes:

• Support for Test & Demonstration Scale Projects: The government intends to set appropriate budget and auction parameters to facilitate its intention to support multiple Test & Demonstration scale floating offshore wind projects in Allocation Round 7 (AR7). ​ This is aimed at supporting technological development, cost reduction, and the UK supply chain. ​
• Phased CfDs for Floating Offshore Wind: The government will implement contract changes to extend phasing to floating offshore wind projects, allowing them to operate as phased CfD projects from AR7 onwards. ​
• Increased Length of CfDs: The government is set to increase the length of CfDs from 15 to 20 years for fixed-bottom offshore wind, floating offshore wind, onshore wind, and solar technologies. This change aims to reduce consumer costs in the medium term, boost investor confidence and address market risks.

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