The government has today published a Draft Budget Notice which sets out that a draft budget of £265 million1 has been set for the fourth allocation round of the Contracts for Difference (CfD) scheme.

This year’s CfD round is set to be the largest yet, with an ambition that it supports delivery of up to double the capacity of renewable electricity secured in the 2019 round – a goal of around 12GW, more capacity than the last three rounds combined. 

The Draft Budget Notice confirms £200 million of support for offshore wind projects, reflecting the Prime Minister’s commitment for 40GW of offshore wind capacity by 2030. Emerging technologies have been allocated a £55 million budget, including £24 million ringfenced for floating offshore wind projects.

The notice also confirms that the government hopes to secure up to 5GW of new renewable energy capacity from established technologies, such as onshore wind and solar, which will be eligible to compete in an allocation round for the first time since 2015.

Final budget parameters for Allocation Round 4 (AR4) will be announced no later than 29 November 2021. AR4 will open to applications on 13 December 2021. 

Draft Allocation Framework

Alongside the Draft Budget Notice, the government has also published the Draft Allocation Framework for AR4 (PDF, 515 KB).

This document sets out the rules for the round and the eligibility requirements that applicants must satisfy.

AR4 online launch event

On Thursday 23 September 2021, the CfD delivery partners will host a special one-day event to launch AR4.

The event will include presentations from each of the delivery partners, a Q&A session and a choice of breakout sessions. 

It will also provide a timely opportunity for potential applicants to further their understanding of the documents that have been published today.

1Monetary budget estimates presented here, including the £265 million total figure, are presented in 2011/12 prices in line with the Control for Low Carbon Levies. These figures are an estimate of annual support in the most expensive year in the first four years following deployment. Actual annual figures will vary over the lifetime of the contract depending on future wholesale electricity prices, and outcomes of the competitive auction process.