Contracts for Difference

Contracts for Difference in a nutshell

The Contracts for Difference scheme (CfD) was established in 2014 to support the UK’s journey to Net Zero.

In its simplest form, the CfD is a contractual mechanism designed to incentivise investments in renewable energy projects in the UK at the least cost to the consumer.

Since 2014, the CfD scheme has successfully facilitated investments in 39GW of renewable and low carbon energy generation projects (including nuclear).

In 2025, the scheme has reached 10 GW of operational capacity, providing enough electricity to power approximately 15 million homes.

We deliver the scheme with our Delivery Partners, the Department for Energy Security and Net Zero (DESNZ), the National Energy System Operator (NESO) and the Office of Gas and Electricity Markets (Ofgem).

Who are our delivery partners?

DESNZ sets the policy and governance arrangements for the scheme, including the allocation rules, timing and budgets of allocation rounds, and Administrative Strike Prices. 

NESO is responsible for managing and operating the front end of the process, including registration, CfD applications, assessing the eligibility of applications for generic CfDs, conducting reviews for non-qualification (Tier 1 Disputes), and CfD allocation.

Ofgem is responsible for handling Tier 2 application appeals.

The Contracts for Difference (CfD) Resource Portal provides a central resource for applicants to navigate the CfD Allocation Rounds.