CfD Stakeholder Bulletin — 31 July 2024
Summary
The government increased AR6 CfD budget to over £1.5 billion, up 50% from the March allocation. Offshore wind receives £1.1 billion (£300m increase), established technologies get £185m (£65m increase), and floating offshore wind and emerging technologies receive £270m (£165m increase) including £15m ringfenced for tidal stream.
Why it matters
This parameter adjustment significantly expands subsidy allocation without addressing the administrative price-setting mechanism that caused AR5's zero clearing. As such, it treats symptoms of underpriced strike prices rather than fixing the fundamental pricing process that determines project viability.
Key facts
- •AR6 budget increased to over £1.5 billion, up 50% from March
- •Offshore wind allocation: £1.1 billion (£300m increase)
- •Established technologies allocation: £185m (£65m increase)
- •Floating offshore wind allocation: £270m (£165m increase)
- •£15m specifically ringfenced for tidal stream projects
Areas affected
Related programmes
Memo
Contracts for Difference: Stakeholder Bulletin 31 July 2024 Government increases Allocation Round 6 budget The government has significantly increased the budget for the sixth allocation round (AR6) of the Contracts for Difference (CfD) scheme to over £1.5 billion, an increase of over 50% from the initial budget set in March. The budget is allocated as follows: • £1.1 billion of the budget will be allocated to offshore wind, up £300 million from the initial budget. Offshore wind has more budget available to it in AR6 than all of the previous CfD rounds combined. • Established technologies, such as onshore wind and solar, will receive £65 million additional support, increasing their budget to £185 million. • Floating offshore wind and other emerging technologies will receive £165 million additional support, increasing the budget for these technologies to £270 million. This includes £15 million ringfenced support for tidal steam projects. Further information on this announcement is available below: • AR6 budget revision notice • Government press release General Data Protection Regulation This stakeholder bulletin is being circulated to people who have opted in to the Contract for Difference stakeholder contact list. We issue these stakeholder bulletins as a convenience to interested parties, however it is not in any way essential to be on this list to participate in major consultations or allocation rounds. Purpose & scope of this list: This list is managed by the Department for Energy Security and Net Zero (and any successor departments) and will be used to inform interested parties of policy developments relevant to the Contract for Difference scheme for renewable energy projects (and any direct successor schemes). It is not used for any other purposes. To be removed from the circulation list: Please send a blank e-mail with the subject ‘opt out’ (if the receiving e-mail you use is different to the one you send the e-mail from, include that e-mail address in the subject of the e-mail) to ContractsForDifference@energysecurity.gov.uk. If you have received this indirectly and want to be added to this list: Send a blank e-mail with the subject line ‘opt in’ to ContractsForDifference@energysecurity.gov.uk. You can withdraw your consent to opt in at any time. We will normally keep your address on this list until you: a) withdraw your consent to opt in, b) the scheme closes without any successor, c) we receive reports your email address is no longer operational, or d) you do not respond to a periodic request from us to reconfirm your desire to opt in.