The UK’s Department for Energy Security and Net Zero (DESNZ) has launched a consultation on proposed reforms to the Contracts for Difference (CfD) scheme for Allocation Round 7 (AR7). One of the proposed reforms is relaxing eligibility criteria for fixed-bottom offshore wind farms so projects that have yet to obtain full planning consent could participate in CfD allocation.
The government opened the consultation period on 21 February and has set 21 March as the deadline for responding to the consultation.
The reforms to the CfD scheme encompass changes to stipulations concerning fixed-bottom and floating offshore wind, as well as onshore wind and solar energy projects.
Several of these changes were set out in the Clean Power 2030 Action Plan the DESNZ issued in December 2024. The action plan is a roadmap to an (almost) fully clean power system in the UK by 2030, with clean sources making up 95 per cent of Great Britain’s electricity generation and gas being used for no more than 5 per cent of total generation.
For offshore wind, in addition to relaxing eligibility criteria on planning consent for fixed-bottom projects, the reforms would also change the way budgets are set and published, including allowing the government to view bid information in anonymised form.
The UK government also plans to extend phasing to floating wind in CfD Allocation Round 7 (AR7). Currently, only fixed-bottom offshore wind projects are eligible to phase and this would enable floating wind projects to be built in several stages to de-risk project delivery.
The CfD reforms also include increasing the CfD contract term beyond the current 15 years, which would reduce overall project costs and give longer market certainty once contracts are awarded.
“The UK already has 30.7 GW of offshore wind either installed or committed, with a further 7.2 GW of capacity consented, against a target capacity range of 43 to 50 GW needed for clean power by 2030. These reforms will enable the UK to go further and faster to secure its position as a clean energy superpower” , the DESNZ said in a press release on 21 February.