FAQs

There are five different timeline scenarios to account for any appeals that may trigger the appeals process. However, we will be engaging industry to streamline the appeals process for future rounds. 

The Allocation Round 6 application window will open on 27 March 2024 and close on 19 April 2024.

It is unlikely that there will be any changes to the Allocation Round 6 (AR6) timeline. However, should any changes need to be made before AR6 opens, the microsite timeline will be updated and the changes will be communicated to industry stakeholders. 

Allocation Round 6 results are expected to be notified and published around 28 June–1 July 2024 under the shortest timeline scenario and around 3–4 September 2024 under the longest timeline scenario. All timeline scenarios can be found here.

Yes, in that scenario it would be sufficient to use the same connection agreement for the CfD application, for all projects covered by the agreement. The connection agreement should allow for the combined capacity of the multiple projects, and all projects should be separately metered

On 22 May 2024, the Prime Minister announced that a General Election will be held on 4 July 2024.

Details of any Allocation Round 6 (AR6) events will be added to the AR6 section of the events page once confirmed.

Projects will be monitored to ensure delivery. Proposals that only partly deliver their commitments will only receive payments for the portioned delivered. Projects that fail to deliver any of their commitments will not receive any payments. Projects that do not deliver on the minimum standard required of Sustainable Industry Rewards could be subject to a form of performance adjustment mechanism. 

The government is working with stakeholders to build the business case for setting an appropriate budget for CfD Sustainable Industry Rewards. 
 

We are consulting on the optimal timing of the CfD Sustainable Industry Rewards (SIRs) allocation as part of the consultation. We have proposed it takes place six months before the opening of a CfD allocation round (AR) and that CfD SIRs run for AR7, 8 and 9. 

All offshore wind and floating offshore wind projects are eligible for CfD Sustainable Industry Rewards (SIRs) regardless of their size (they will no longer need to submit Supply Chain Plans). Other technologies eligible to enter the CfD will still need to submit a Supply Chain Plan if their project exceeds 300MW (these will not be submitting SIRs). 
 

The government has launched an eight-week consultation on introducing a CfD Sustainable Industry Reward scheme. CfD Sustainable Industry Rewards is the new name for what were once called non-price factors. The consultation closes on 11th January 2024.

Changes have been made to several areas of the Allocation Framework. The changes reflect policy decisions made ahead of Allocation Round 6 (AR6) and clarify existing terms and conditions. Further details are available on the AR6 Allocation Framework GOV.UK page.

No. Any introduction of new technologies would be subject to a consultation.

No. Any removal of technologies would be subject to a consultation. 

The Tidal Stream minimum will be applied on a monetary budget (£million) basis and will operate as a ‘hard’ constraint (i.e., the minimum auction will close when this limit is breached).  

The maxima will be applied on a monetary budget (£million) basis and will operate as a ‘hard’ constraint.  

We have a £270m budget for emerging technologies, including floating offshore wind. This is the biggest ever budget for this group of technologies. 

No. The budget is presented in 2011/2012 prices and is an estimate of annual support in the first four years following deployment. Actual support figures will depend on a range of factors including the auction clearing prices and future wholesale electricity prices, which are highly uncertain.  

This is the largest budget ever – almost seven times higher than the budget for AR5. Higher project costs are already reflected in significantly higher Administrative Strike Prices (the maximum price government will pay for each technology), published in November 2023.  

If the budget assigned to minima auctions is not used fully, any remaining budget will be available to all technologies (including those subject to minima) in the general Pot 2 auction. 

Pot 2 will have a monetary minimum of £15m on Tidal Stream – an increase of £5m compared to the original budget announced in March (which was £10m). This provides Tidal Stream projects with ringfenced budget to increase the likelihood of projects being successful. 

Pot 1 will have monetary maxima of £185m on Solar PV, Onshore Wind and Remote Island Wind. This is to create technology-specific clearing prices. This allows competition between technologies, gives us important price discovery, and avoids a cheaper technology’s clearing price being dragged upwards. They are set at the level of the total pot Budget, so they do not influence the mix of technologies. Therefore, the cheapest projects win.  

Regulations allow Secretary of State to revise the budget upward. This power is usually exercised upon receiving the formal valuation of qualifying projects from the National Grid ESO. This announcement means there is more budget available for projects and signifies another step forward in the government’s mission to deliver its clean-power-2030 goal

The total budget for AR6 is £1.555 billion, making it the largest CfD budget ever. This is a £530 million increase on the original budget announced in March.

An applicant must include a declaration with its application confirming that the proposed CfD unit is not an ‘excluded application’ under regulation 14 of the Contracts for Difference (Allocation) Regulations 2014 (as amended). An application would be excluded, for example, if it is subject to a capacity agreement under the Capacity Market or is awaiting determination of an application for a capacity agreement. However, a generating asset in receipt of another form of government subsidy, such as under the Capacity Market, may be co-located on the same site as a proposed CfD unit provided the electricity to be generated by the CfD unit is metered separately from the other (non-CfD) facility. The applicant must confirm this in the declaration it submits to National Grid ESO with its application to participate in Allocation Round 6.
 
Applicants should familiarise themselves with Schedule 5 of the Allocation Framework, as well as the CfD Standard Terms and Conditions, which set out further metering requirements, including the need for a CfD unit to be metered separately from other facilities using a BSC-compliant meter (note that the BSC element of this requirement does not apply to the CfD Private Network Agreement, but a CfD unit must still be metered separately from other facilities under this Agreement).

The volume of capacity successful will depend on a range of factors, including bid prices and the volume of eligible applications. We cannot prejudge the outcome of AR6.

Valuing projects using high estimated load factors reduces the risk that in-life spend exceeds spend forecasted at the point of allocation. If CfD-supported projects were to generate more than expected, the support costs paid by consumers would be larger than initially forecast. 

As is set out in detail in the accompanying note to the AR6 Budget Notice (PDF, 208KB), this is a misunderstanding of the role the budget plays in the auction. 

Government makes decisions about CfD auction design taking into account a wide range of evidence. This includes our best knowledge about the project pipeline to carefully balance the need to ensure renewable deployment while delivering at low cost to the electricity consumer. 

Where the maxima are the same size as the total pot budget, the given technology is not constrained any more than they would be without a maxima. Instead, the given technology clears at its own price rather than the clearing price determined by the whole pot. This helps to ensure competitive price discovery by avoiding the price of one technology being dragged upwards by another, more expensive technology. The maxima do not separate projects in the auction; projects still compete against each other in the pot. 

This refers to capacity withdrawn from projects previously awarded CfDs under the permitted reduction process in the contract, which allows a maximum of 25% of original capacity to be withdrawn. We are aware some projects may apply to Allocation Round 6 with this withdrawn capacity. 

Allocation Round 6 (AR6) will feature three auction pots, with offshore wind in its own auction pot. This change reflects the large pipeline of offshore wind expected this round and the strength of competition amongst established technologies in Pot 1. 

Energy from Waste with CHP
Hydro (>5MW and <50MW)
Landfill Gas
Onshore Wind (>5MW)
Remote Island Wind (>5MW)
Sewage Gas
Solar Photovoltaic (PV) (>5MW)

The established technology pot in Allocation Round 5 (AR5) had three delivery years, with the first two years (2025/26 and 2026/27) intended for technologies that are quicker to build such as onshore wind and solar. The latest delivery year in AR5 was added to accommodate offshore wind projects, which tend to have a longer build time. With offshore wind’s move to Pot 3, Pot 1’s delivery years in AR6 are +1 from the earlier two years available in AR5.

Delivery years are determined prior to each allocation round, along with other auction parameters. This makes it difficult to set out exact delivery years for future rounds.

Applicable Delivery Years for AR6 will differ across the three auction pots. 

We review the CfD auction parameters every year and will make changes to reflect the pipeline of eligible projects and that support the objectives of the scheme regarding decarbonisation, consumer costs and security of supply.

The assumptions and methodology used to derive Administrative Strike Prices (ASPs) for Allocation Round 6 (AR6) will be reviewed ahead of AR7 to ensure ASPs best reflect the latest view of potential project costs and future revenues. An assessment of economic conditions will be undertaken to judge whether adjustments implemented for ASPs in AR6 will be necessary for AR7. 
 

The CfD is a competitive auction process, incentivising cost-effective projects to come forward, balancing delivery of our decarbonisation commitments with potential impacts on consumer bills.

Administrative Strike Prices (ASPs) have been set based on independent evidence on generation costs. Considering recent market volatility, and following industry engagement, we undertook a detailed analysis of our cost assumptions and have made revisions to ensure the current macroeconomic environment is reflected in ASPs. 

The published Administrative Strike Price (ASP) methodology note sets out the approach for determining ASPs for the sixth Contracts for Difference allocation round.

The overall methodology for producing Administrative Strike Prices (ASPs) is largely consistent with previous rounds. The Department for Energy Security and Net Zero has comprehensively reviewed underlying assumptions to ensure they reflect the current macroeconomic environment and ambition for technologies key to our decarbonisation pathway.

Administrative Strike Prices are presented in 2012 prices and can be adjusted to today’s prices by using the Consumer Price Index inflator stated in the published Allocation Round 6 core parameters notice.

Since Allocation Round 5, we have undertaken a comprehensive review of our independent evidence base on project costs for renewable technologies eligible to participate in the CfD scheme. This demonstrates the material cost pressures being faced by renewable project developers in the context of challenging macroeconomic conditions. 

If an application is prequalified in the CM and an application is made to the CfD, it will be ineligible (unless or until a determination is made that the CM application is unsuccessful). This is based on Regulation 14(10)(c) and the interpretation offered in Regulation 14(10A) of the Contracts for Difference (Allocation) Regulations 2014 (as amended).