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UK begins round 4 of 12-GW auction under CfD auction scheme

Last Updated on 08th January 2024

The Contracts for Difference (CfD) scheme, which will support up to 12 GW of renewable electricity generation capacity, has entered its fourth allocation phase.


As part of the government's renewable energy auction system, the support program will provide GBP 285 million every year to low-carbon electricity projects.


This is the largest round in the scheme, with more capacity being awarded than in the previous three rounds combined.


Applications will be accepted until January 14, 2022, with final results expected in the spring-summer of that year. CfDs with a 15-year term are available under the scheme.


The overall support is divided into three pools, with a budget pool of GBP 200 million per year set for for offshore wind projects.


GBP 75 million will be allocated to less-established renewables, including GBP 24 million set aside for floating wind projects and GBP 20 million for tidal stream plans.


The remaining pool will provide GBP 10 million in funding for proven technologies like onshore wind and solar, which were previously excluded from the scheme.


This fund will support up to 5 GW of capacity, with a 3.5 GW limit on combined onshore wind and solar photovoltaic (PV) technologies.


For new technologies like offshore wind, there will be no capacity cap.


In keeping with the country's 2050 net-zero target and attempts to increase the resilience and independence of its energy system, Round 4 is accessible to a broader range of technologies.


The CfD plan allows for cost reductions, such as in offshore wind, where prices fell by nearly 65 percent between 2015 and 2019.


The offshore wind capacity projected to be supplied as a result of the new round, according to official estimates, could power nearly 8 million homes.


The computation is based on a 7 GW offshore wind pipeline that has been approved.


By 2030, the United Kingdom hopes to have 40 GW of offshore wind turbines, with 1 GW coming from floating wind farms.


CfD auction rounds have so far resulted in the approval of 13 GW of offshore wind and 16 GW of new renewable energy projects.


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