UK mulls changes to CfD under AR7

The UK's Department for Energy Security and Net Zero (DESNZ) has proposed amendments to the country's Contracts for Difference (CfD) scheme under the AR7 allocation round.

 Allocation Round 7 (AR7) is set to go live in 2025.

Proposals for AR7 include:

• enabling repowering projects to apply for the CfD in AR7 in limited circumstances
• expanding the phased CfD policy to floating offshore wind projects
• streamlining the appeals process for annual auction rounds
• introducing changes to metering to better enable CfD generators to co-locate with other assets

The consultation on AR7 proposals close on 7 March 2024.

DESNZ is also seeking early views on considerations future allocation rounds.

Considerations for future allocation rounds:

• how could the CfD support innovation in floating offshore wind foundation technology as the sector develops?
• how could the CfD support the delivery of improved coordination of offshore transmission infrastructure?
• should CfD indexation be updated to better reflect inflation risks?