Government reforms CfD scheme with emphasis on certainty and flexibility.

The Government is set to reform the CfD scheme, with an increase the length of new CfD contracts from 15 to 20 years for fixed-bottom offshore wind, floating offshore wind, onshore wind and solar technologies. It will also relax eligibility requirements to allow fixed-bottom offshore wind projects to apply for a CfD while awaiting full planning consent.

These reforms should encourage investment, with a longer timespan for repayment and greater certainty, and potentially lower costs to consumers.

The reforms also mean that proposed contract and rule changes will allow repowered onshore wind projects to access CfD support and extend phasing to floating offshore wind.

In addition the method for setting budgets will be changing, allowing the Energy Secretary to review developer bids before setting the final budget. Again, this will add certainty on capacity and allow a focus on value for money.

Commenting on reforms, Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit (ECIU) said: "The Contracts for Difference scheme has been largely responsible for the huge growth in the UK's offshore wind market over the past decade, making it the second largest in the world. More clarity over arrangements for this year’s auction will likely help to max out the capacity secured to ensure we limit the gas we need to buy from volatile international markets. Plus, changing the way the artificial 'budget' is set will likely mean that more British wind and solar is generated once it's built, stabilising bills as the generators receive a fixed price.”

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