Renewable energy industry groups have welcomed the UK government’s publication of key parameters for the upcoming Allocation Round 7 (AR7) of the Contracts for Difference (CfD) scheme, calling the changes a step toward improved alignment with market realities.
The Department for Energy Security and Net Zero (DESNZ) released details of the round on Tuesday, including increases to Administrative Strike Prices (ASPs) for several wind technologies and the creation of a dedicated auction pot for floating offshore wind.
Ana Musat, executive director of policy and engagement at RenewableUK, said the updated framework reflects a more pragmatic approach than previous rounds.
“We are pleased to see parameters that are more reflective of market realities than in previous years,” she said. “Whilst wind energy projects haven’t been immune to the inflation and supply chain pressures facing all major infrastructure projects, they remain cheaper than other forms of electricity generation such as new nuclear and new gas plants, so they offer the best value for money for billpayers.”
Musat noted that competitive bidding is expected to drive prices below the published ASPs, which she described as “a consumer backstop.” She also welcomed the separation of floating wind into its own auction pot, saying it would help the UK advance in a global race to commercialise the technology.
“It’s vital that we unlock investment in more test and demonstration projects as soon as possible, as this will enable us to scale up this innovative technology faster,” she added.
Claire Mack, chief executive of Scottish Renewables, described the CfD changes as “a promising step forward to build much needed momentum behind Scotland’s impressive pipeline of clean energy projects.”
Mack supported the introduction of a separate clearing price for fixed-bottom offshore wind projects in Scotland, arguing that the mechanism would help unlock economic benefits and deliver better value for consumers.
“An ambitious budget will be needed to ensure this year’s full potential can be maximised,” she said. “Next steps must also include the design of an enduring solution to transmission charging, as part of wider strategic planning of our energy system, to create the fairer system we need.”
The AR7 application window is due to open in August. Industry stakeholders have called for continued government engagement as parallel energy reforms are developed, including updates to grid connection processes and spatial planning frameworks.