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.

UK-wide

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

  1. Review Allocation Framework

    Review AR7 Allocation Framework and eligibility criteria

  2. Ensure milestones on track

    Ensure planning and grid connection milestones are on track

  3. Register on CfD portal

    Register on CfD Allocation Round portal before application window

  4. Submit application

    Submit application during August 2025 window

  5. Sign CfD contract

    If successful, sign CfD contract with Low Carbon Contracts Company

  6. Meet commissioning date

    Meet Target Commissioning Date to receive payments

CfD Allocation Round 7

Working in the civil nuclear industry

Regulatory compliance requirements for businesses operating in the civil nuclear industry including site licensing, security vetting, liability insurance, and decommissioning obligations under Office for Nuclear Regulation oversight.

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