Guide
Contracts for Difference (CfD)
The main government support mechanism for new low-carbon electricity generation. CfDs provide long-term price stability for renewable generators through competitive allocation rounds.
How CfDs work
CfDs provide generators with a guaranteed 'strike price' for their electricity. When wholesale prices are below the strike price, generators receive a top-up payment. When prices are above, they pay back the difference.
Allocation Round 7 (AR7)
Key eligibility requirements
- Planning consent (or 12+ months since reaching relevant planning stage for offshore wind)
- Grid connection agreement
- Evidence of project deliverability
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Review Allocation Framework
Review AR7 Allocation Framework and eligibility criteria
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Ensure milestones on track
Ensure planning and grid connection milestones are on track
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Register on CfD portal
Register on CfD Allocation Round portal before application window
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Submit application
Submit application during August 2025 window
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Sign CfD contract
If successful, sign CfD contract with Low Carbon Contracts Company
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Meet commissioning date
Meet Target Commissioning Date to receive payments