What is a Contract for Difference (CfD)?

The CfD is a long-term contract between us and a low carbon electricity generator. We now manage 165 CfD contracts (95 through AR5) and with annual auctions round, the CfD portfolio will continue to grow.

The CfD provides the generator with a guaranteed price per MWH of electricity generated. It is designed so that generators are paid when this 'guaranteed price' (strike price) is higher than the price of electricity on the market (market reference price). If this is reversed and the market price of electricity is higher, generators make payments back to suppliers and therefore consumers.

Benefits for Low Carbon Generators: The scheme protects generators against exposure to market price volatility.

Benefits for Consumers: Consumers are protected from high electricity costs as generators pay money back to suppliers if the price is higher than the agreed price.

Benefits for Investors: The CfD contract provides a guaranteed fixed price for the electricity produced over the course of the contract, providing certainty on returns and therefore reducing the financing cost of the project.

This is shown in the diagram below.


Data Portal

Our Data Portal has been developed to support the Open Data initiative by DESNZ (The Department of Energy Security and Net Zero) and Ofgem (Office of Gas & Electricity Markets) We are keen to ensure our stakeholders can easily download data that we publish on their scheme dashboards. More datasets will be published in the future in a phased approach. The CfD Datasets can be viewed here

How do generators gain CfD contracts?

Low-carbon electricity generators gain CfD contracts through a competitive auction, after which they have a number of milestones to meet, to preserve the term for payments, which is typically 15 years. These include proving their commitment to the project within 12 months of signing the contract, and commissioning 80% of the initial capacity estimate within the target commissioning window.

Milestones at a glance:



to preserve the term for payments.



to prove their commitment to the project upon signing the contract.



commissioned of the initial capacity estimate within the target commissioning window.

CFD project growth

Since launched, CfDs have proven extremely successful. The animation shows how our projects have evolved.

For detailed information on live projects, visit the CFD Register map.