Contracts for Difference (CfD)

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 29.4 gigawatts of renewable energy generation (including nuclear), with 6.4 GW currently operational. In 2022, projects managed under CfD’s generated enough energy to power 7 million homes and mitigated  5,822,352 CO2 emissions.

We delivery the scheme with our Delivery Partners, the Department for Energy Security and Net Zero (DESNZ), National Grid ESO and Ofgem.

Who are our Delivery Partners?

The Department for Energy Security and Net Zero sets the policy and governance arrangements for the scheme, including the allocation rules, timing and budgets of allocation rounds, and Administrative Strike Prices. 

National Grid Electricity System Operator (Electricity Market Reform Delivery Body) 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.