Government accelerates renewable energy supplies


The next Contracts for Difference (CfD) round will open in March 2023 and be the first in a series of annual auctions.

CfD supports new low carbon electricity projects by awarding contracts through a competitive auction process, backing domestic energy production.

The rollout of low-cost renewable energy in the UK will be accelerated as the Government ramps up auctions for its flagship renewables scheme to boost investment and jobs.

The frequency of auctions for funding through the Contracts for Difference (CfD) scheme is being changed to every year rather than every two years.

This will support renewable electricity producers and boost the UK’s renewable energy infrastructure. The change kicks in from March 2023 when the next CfD round opens.

CfDs are the Government’s primary method of supporting renewable energy, driving down the cost of technologies and playing an important role in leveraging £90 billion of private investment by 2030.

The auction scheme has already proved successful at bringing down the cost of offshore wind by around 65% over the past decade – helping the UK become one of the world’s largest generators of wind power.

In the last allocation round, 12 new contracts were awarded, with the potential for nearly 6 GW of further capacity.

This is enough to power over seven million homes at record low prices and could see the creation of thousands of jobs across the UK.

Increasing the frequency of auctions will also give more projects the opportunity to enter the system, helping to scale-up the UK’s supply of renewable energy and to support the country’s long-term energy security.

The  announcement follows Government announcements to support the UK’s nuclear sector: This includes up to £1.7 billion to enable a final investment decision on a large-scale nuclear project in this Parliament, the Nuclear Energy (Financing) Bill, a £120 million Future Nuclear Enabling Fund, and a £210 million grant to a Rolls-Royce-led consortium to develop a UK Small Modular Reactors design.

Bids under the CfD scheme that are cost-effective and offer taxpayers’ value for money are successful, driving efficiency and securing new renewable generating capacity here in the UK.

In the last allocation round, 12 new contracts were awarded, with the potential for nearly 6 GW of further capacity.

This is enough to power over seven million homes at record low prices and could see the creation of thousands of jobs across the UK.

Under the Net Zero Strategy, the government is committed to accelerating the deployment of low-cost, low-carbon electricity generation by reviewing the frequency of the CfD auctions.

Increased CfD round frequency underlines the government’s commitment to accelerate low carbon electricity generation to achieve a fully decarbonised electricity system by 2035.

It follows the government’s announcement last week of a £9.1 billion package of support to help households with rising energy bills.

This includes a £200 discount on household energy bills this Autumn for domestic electricity customers in Great Britain, which will be paid back automatically over the next 5 years.

There will also be a £150 non-repayable rebate in Council Tax bills for all households in Bands A-D in England and £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax rebate.

These new measures are on top of the existing £12 billion support the government is providing for the cost of living this financial year and next. This includes reducing the Universal Credit taper rate, raising the National Living Wage, freezing alcohol and fuel duties and providing targeted help with energy bills.

The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting new low carbon electricity generation projects.   CfDs are 15-year private law contracts between electricity generators and the Low Carbon Contracts Company (LCCC), a government-owned company that manages CfDs at arm’s length from government.   Contracts are awarded through a competitive auction; the lowest price bids are successful, which drives efficiency and cost reduction and is the cheapest way to secure new renewables generating capacity. These auctions are run in CfD allocation rounds held approximately every two years since they began in 2014.





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