The government has announced today that Contracts for Difference (CfD) allocation rounds will be held annually from March 2023 – when the fifth allocation round will open to applications.
The announcement was made in a written ministerial statement to Parliament this morning, followed by a government press release.
Previously, CfD auctions had been held every two years. The decision to move to annual auctions comes following the outcome of an internal review of the frequency of CfD auctions, which the government agreed to undertake in the Net Zero Strategy.
The review found that annual CfD allocation rounds can help accelerate the deployment of low-carbon electricity generation, increase market confidence and support investment in the sector.
More frequent CfD rounds will support the delivery of renewable technologies identified in the Net Zero Strategy as key to decarbonising the power sector, such as low-cost offshore wind, locally supported onshore wind, and solar PV. At the same time, greater auction frequency will provide a stable platform for emerging technologies – including tidal stream and floating offshore wind – to demonstrate their scalability and cost-efficiency.