CfD Stakeholder Bulletin — 14 December 2022
Summary
DESNZ published Allocation Round 5 parameters and a consultation on future CfD rounds. AR5 opens March 2023 with pot structure, Administrative Strike Prices, and delivery years now confirmed. The consultation on AR6 and beyond closes 7 February 2023.
Why it matters
This confirms the mechanism that determines revenue streams for renewable generators over 15-year contracts, directly affecting project viability and investment decisions. The consultation signals potential structural changes to the CfD scheme beyond AR5, creating uncertainty for developers planning projects in later rounds.
Key facts
- •AR5 opens March 2023
- •Final Budget Notice published March 2023
- •AR6 consultation closes 7 February 2023
- •Documents include pot structure, Administrative Strike Prices, and delivery years
Timeline
Areas affected
Related programmes
Memo
What this is about
DESNZ published the core parameters for CfD Allocation Round 5 alongside a consultation on structural changes to the scheme from AR6 onwards. AR5 was confirmed to open in March 2023, with the pot structure, Administrative Strike Prices, and delivery years now set. The consultation on future rounds closes 7 February 2023.
The timing is deliberate. By publishing AR5 parameters and a forward-looking consultation simultaneously, DESNZ gives developers certainty on the immediate round while signalling that the rules may change for later ones. This creates a two-track dynamic: AR5 applicants can proceed with known parameters, but anyone planning projects for AR6 or beyond faces uncertainty about pot structure, strike price methodology, and eligibility — the three variables that determine whether a project is financeable.
The CfD scheme is the primary revenue mechanism for new renewable generation in GB. Strike prices set through allocation rounds determine generator revenue streams for 15 years. Every parameter choice — which technologies compete against each other, what the maximum strike price is, which delivery years are eligible — directly determines which projects get built, where, and at what cost to consumers through supplier levies.
Options on the table
This bulletin announces the consultation but does not reproduce its content. The four documents published are:
- AR5 Core Parameters — confirms pot structure, Administrative Strike Prices, and delivery years. These are final for AR5; the Budget Notice (which sets the total funding envelope) follows in March 2023. - Draft Allocation Framework — the rules and eligibility requirements for AR5. This is where technology definitions, qualification criteria, and auction mechanics sit. - Administrative Strike Price Methodology Note — explains how ASPs are calculated. ASPs are the ceiling prices in each pot: no project can bid above them, so they function as the government's view of what each technology should cost. - Consultation on future CfD rounds — invites views on amendments for AR6 and beyond. This is the forward-looking document where structural changes are on the table.
Without the full consultation document, the specific options cannot be enumerated here. However, the pattern from previous CfD consultations suggests the likely areas under review: pot structure (whether technologies compete together or in separate pots), strike price levels and methodology, delivery year windows, and eligibility criteria for emerging technologies. Each of these choices redistributes risk between developers (who bear development costs against uncertain auction outcomes) and consumers (who bear the 15-year levy obligation for every contract awarded).
Questions being asked
The consultation questions are contained in the separate consultation document, not reproduced in this bulletin. The bulletin confirms the consultation closes 7 February 2023 and directs stakeholders to the full publication.
How to respond
Deadline: 7 February 2023
Submission: The bulletin directs stakeholders to the published consultation document (linked from the GOV.UK publication page). The contact email for the CfD team is BEISContractsForDifference@beis.gov.uk, though formal responses should follow the method specified in the consultation document itself.
Note: This bulletin is 340 words of announcement text, not the consultation itself. The four substantive documents — AR5 parameters, draft allocation framework, ASP methodology, and the future rounds consultation — are separate publications. A full memo on the consultation options and questions requires the consultation document, which should be ingested separately.
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`★ Insight ─────────────────────────────────────` This is a common pattern in the doloop pipeline: CfD stakeholder bulletins are wrapper documents that announce other publications. The substantive content lives in the linked documents — in this case, four separate PDFs. The bulletin itself is useful as a dated record of what was published and when, but the memo quality is constrained by the source text available. The consultation document on future CfD rounds would be the high-value target for a full briefing. `─────────────────────────────────────────────────`
Source text
Contracts for Difference: Stakeholder Bulletin 14 December 2022 Government has published key Allocation Round 5 documents and a Consultation on Future CfD rounds The government has today published key documents relating to the Contracts for Difference Allocation Round 5 (AR5) and a consultation on the future of the Contracts for Difference scheme. You can find out more about the publications here. AR5 is due to open in March 2023. Documents are being published today to provide industry and potential AR5 applicants with key information ahead of the round opening in March 2023. The documents published today are: • AR5 Core Parameters - confirms the pot structure, Administrative Strike Prices and delivery years for AR5. The final Budget Notice will be published in March 2023. • Draft Allocation Framework - sets out the rules and eligibility requirements for AR5. • Administrative Strike Price Methodology Note - explains how the Administrative Strike Prices are determined. • Consultation on the future of the CfD scheme - invites views on potential amendments for Allocation Round 6 (AR6) and beyond. The consultation will be open until 07 February 2023. UK General Data Protection Regulation This stakeholder bulletin is being circulated to people who have opted in to the Contracts 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 Business, Energy and Industrial Strategy (BEIS) (and any successor departments) and will be used to inform interested parties of policy developments relevant to the Contracts 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 BEISContractsForDifference@beis.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 BEISContractsForDifference@beis.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.