The UK Government has confirmed a series of key reforms to the Contracts for Difference (CfD) scheme, including the decision to allow fixed-bottom offshore wind projects without full planning consent to participate in Allocation Round 7 (AR7), which will open for applications in August this year.

According to a document published on 15 July by the Department for Energy Security and Net Zero (DESNZ), projects will be eligible to compete if they have reached certain stages of the consent process at least 12 months prior to the application deadline — such as having their application accepted by the Planning Inspectorate in England and Wales, or having entered the public consultation phase under Section 36 in Scotland.

In addition, the Government will introduce a dedicated budget for fixed-bottom offshore wind, which will be announced ahead of the bidding window. The Secretary of State will retain the discretion to increase this budget if projects exceeding the initial cap are deemed beneficial to consumers, in order to maximise the awarded capacity.

Longer Contracts, greater flexibility and new criteria

Among other approved measures is the extension of CfD contract lengths from 15 to 20 years for key technologies such as fixed-bottom and floating offshore wind, onshore wind, and solar PV — a move aimed at strengthening private investment in renewables amid rising global competition.

The commissioning window for solar projects will also be extended from 3 to 12 months, and technical reforms will be adopted to enable the repowering of onshore wind farms and the phased scaling-up of floating offshore wind projects.

Industry reaction: A timely Boost for attracting investment

Nick Hibberd, Policy Director at RenewableUK, welcomed the Government’s decisions: “The publication of key details on the upcoming clean energy auction provides the clarity and certainty investors need for vital renewable projects. Maximising the awarded capacity in this and future auctions will be essential to achieving the 2030 clean energy target.”

RenewableUK also highlighted that allowing participation from offshore wind projects without full consent is a significant move, though it cautioned that eligibility will depend on strict criteria. This reform could make up to 20GW of capacity eligible — exceeding the UK’s current offshore wind capacity of around 16GW.

The association also praised the extension of CfD contracts to 20 years, stating that it “improves the competitiveness of UK projects in a challenging global environment.”

Regarding the new budget model, RenewableUK noted that the Secretary of State’s partial visibility of bids exceeding the initial cap would enable adjustments to include economically viable projects. This could help avoid the “underuse of funds” seen in previous years.

The organisation also welcomed the introduction of a specific budget allocation for floating wind demonstration projects — a key step in maintaining the UK’s global leadership in this emerging technology.

Finally, it urged the Government to publish the remaining details of the auction as soon as possible, with “realistic expectations around future electricity prices, administrative strike prices aligned with global cost pressures, and greater flexibility on delivery milestones.”