UK initiates seventh round of Contracts for Difference (CfD) assignments
The UK Government has launched the Contracts for Difference (CfD) Allocation Round 7 (AR7), a strategic move towards the nation's target of a fully decarbonised power system by 2035. This round, which opened its application window on 7 August 2025 and closes on 27 August 2025, is expected to focus on fixed-bottom and floating offshore wind projects, among others [1][5].
Timeline and Scenarios
Results from AR7 could be issued as early as 9–10 December 2025. However, the longest timeline extends up to 25–26 February 2026, depending on whether challenges arise during the qualification process [1][5].
Changes and Reforms
Contract terms for various renewable technologies, including fixed-bottom and floating offshore wind, onshore wind, and solar, have been extended from 15 to 20 years. This move aims to reduce revenue risk, lower the cost of capital, and lead to cheaper financing and strike prices [3][5]. No new capacity ambition statement will be published for AR7, but a monetary budget for the round will be published before the sealed-bid window opens. Project bids breaching this budget will be subject to further review, with potential budget increases considered if beneficial to consumers [3].
Eligibility and Application
Eligibility for AR7 includes a broad range of renewables, such as solar PV (above 5 MW), onshore wind, sewage gas, remote island wind, hydro, landfill gas, and energy from waste with CHP generation. All these compete in Pot 1 [5]. The Allocation Framework published by DESNZ outlines the rules and eligibility requirements for AR7 applicants, including guidance for Minor and Necessary contract modifications relevant to AR7 contracts [2][4].
Support Measures: Clean Industry Bonus
AR7 continues with measures to encourage UK-based manufacturing and supply chain investment via the Clean Industry Bonus. This bonus supports projects that invest in UK content, promoting domestic green industry growth and supply chain security [5]. The budget for the Clean Industry Bonus is GBP 20.1 million per GW of capacity applying [6].
Further Information
For more information and increased visibility, companies can consider options for branded articles and full-page company profiles in the business directory offered by offshoreWIND.biz, a website read by thousands of professionals every day [7]. offshoreWIND.biz can also be followed on LinkedIn and Google News [7].
In summary, AR7 opens as a strategically important round with extended contract lengths, clear budget management, inclusive eligibility, and industry-strengthening incentives, reinforcing the UK's clean energy expansion ambitions before 2035. With a total budget for the Clean Industry Bonus of over GBP 544 million, this round promises to drive further investment in the UK's renewable energy sector.
References: 1. gov.uk - AR7: CfD Allocation Round 7 2. DESNZ - AR7 Allocation Framework 3. gov.uk - AR7 Consultation Response 4. DESNZ - AR7 Allocation Framework Guidance 5. offshoreWIND.biz - AR7 Overview 6. gov.uk - Clean Industry Bonus Guidance 7. offshoreWIND.biz - Advertising Opportunities
- The extended contract lengths in AR7 are anticipated to lower the cost of capital and leads to cheaper financing and strike prices, thereby attracting more investment in the finance industry, specifically in the renewable energy sector.
- The UK Government's Clean Industry Bonus, with a total budget of over GBP 544 million, is designed to encourage UK-based manufacturing and supply chain investment, fostering growth in the energy industry and ensuring supply chain security.
%20assignments){kind=link}