Government confirms CfD extension

The government has confirmed it will extend the delivery years for the Contracts for Difference (CfD) scheme until March 2026. That means budgets can now be allocated for future CfD […]

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By Priyanka Shrestha

The government has confirmed it will extend the delivery years for the Contracts for Difference (CfD) scheme until March 2026.

That means budgets can now be allocated for future CfD rounds until the extended date.

A CfD is a contract between a low carbon electricity generator and the Low Carbon Contracts Company (LCCC), a government-owned company. The generators are incentivised for the low carbon electricity produced.

The news follows a five-week consultation, in which all respondents agreed with the proposed amendment, according to the Department for Business, Energy and Industrial Strategy (BEIS).

The current regulations only give BEIS the power to run an allocation round and allocate budgets for delivery years until 31st March 2020.

BEIS added: “The results of our recent government consultation supported the proposed amendment to the CFD (Allocation) Regulations (2014) to extend the delivery years in which budget can be allocated to end March 2026 in order to run future allocation rounds and it is our intention to make the amendment.”

The government also held a consultation earlier this year on excluding CfD projects from participating in future auction rounds for a longer period if they fail to deliver.

The first CfD solar project was connected to the grid last month and 39 renewable projects have passed the CfD milestone requirement.