UK Sets GBP 205 Million CfD Round 5 Budget, Offshore Wind Projects to Compete for Support from Established Technologies’ Pot

The UK government has confirmed the budget of GBP 205 million (around EUR 233 million) for this year’s Contracts for Difference (CfD) scheme. Most of this budget in CfD Round 5, set to open for applications on 30 March, will be available for established technologies which, for the first time, include offshore wind.

In the CfD Allocation Round 4 (AR4), held last year, the UK government awarded contracts to renewable energy projects totalling almost 11 GW in capacity. Offshore wind farms accounted for 7 GW of these.

The fifth allocation round (AR5) will also award Contracts for Difference to different technologies.

This year, the CfD auction will feature two pots with offshore wind now competing alongside other established technologies. According to the UK government, this will enable offshore wind to build on its success and remain competitive with other renewable technologies.

In Pot 1, GBP 170 million (around EUR 193 million) are reserved for established technologies, which for the first time includes offshore wind and remote island wind.

Floating wind projects will be able to compete for the CfD budget from Pot 2, which has GBP 35 million (around EUR 40 million) available for emerging technologies. The government has also designated a GBP 10 million (around EUR 11 million) ring-fenced budget for tidal stream technologies with an aim to unlock the tidal power industry in the UK.

Results of the fifth CfD auction are expected to be announced in late summer/early autumn 2023.

“Our flagship Contracts for Difference scheme is already delivering clean, homegrown energy as well as growing a green economy with green jobs”, said Graham Stuart, UK Minister of State for Energy Security and Net Zero.

“Today’s budget announcement, the move to annual auctions and continued investment in renewable energy will limit the impact of events like Putin’s illegal war in Ukraine and drive our overriding priority for the UK to have amongst the cheapest wholesale electricity prices in Europe”.

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