Updates to the CfD Scheme For AR7 - July 2025

The UK government announced a raft of updates to the Contracts for Difference (CfD) scheme last week. The Department for Energy Security and Net Zero (DESNZ) published a list of amendments that will come into effect for the upcoming Allocation Round 7 (AR7), which is expected to open in August. The key updates are listed below.

20 Year CfD Contracts

In a major development, the contracts awarded in the upcoming auction will be for 20 year tenor, up from the 15 year duration of all prior CfDs. This will apply to solar, onshore wind, and both fixed and floating offshore wind. By providing longer-term contracts, projects benefit from greater price certainty that should in turn reduce the cost of capital and ultimately prices, whilst attracting increased investment. 

Extended Commissioning Window for Solar

Solar projects will also benefit from a more relaxed commissioning window, with the Target Commissioning Window extending from 3 to 12 months. This flexibility will mitigate the supply chain and delivery risks associated with solar developments, particularly given the increasing size of the projects.

Offshore Wind Participation without Planning

Fixed-bottom offshore wind are now able to enter the auction without having secured full planning consent. As long as 12 months have passed since the project's application for a Development Consent Order was accepted for examination, it is possible to participate in AR7. This should facilitate improved competition 

Repowered Onshore Wind Eligible

CfDs are now available for repowered onshore wind projects, providing a new lease of life to existing sites that are nearing the end of their technical lifetime. By replacing the aging turbines with newer, more efficient models, more renewable energy can be generated with fewer turbines. This should bring additional capacity into the CfD with less greenfield development.

Looking to Extract Further Value from the CfD?

Renewable Exchange welcomes these ongoing adaptations to the CfD scheme, which are crucial for meeting Net Zero goals and ensuring energy security in Great Britain.

If you have a project that has secured a CfD or are planning to bid in a future auction, reach out to discuss how we can extract additional value through optimising the route to market and merchant nose PPAs: contact us at ppa@renewable.exchange.

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