This page was reviewed and updated on 18/07/25.
The UK government has announced changes to its flagship clean energy subsidy programme, Contracts for Difference (CfD), aimed at boosting investor confidence and speeding up renewable energy deployment.
What’s changing?
Under the reforms, the contract length for offshore wind, onshore wind, and solar projects will increase from 15 to 20 years. The extension is designed to improve financial viability by spreading costs over a longer period, giving developers greater revenue certainty.
To accelerate offshore wind development, projects using fixed-bottom technology will now be allowed to enter auctions before securing full planning consent. This change is intended to reduce delays and increase competition, potentially lowering costs for consumers.
Another key update is a new approach to selling action budgets. For the first time, the Energy Secretary will review developer bids before finalising the budget, giving the government more control over capacity procurement and ensuring better value for money.
Why the CfD reforms matter
Energy secretary Ed Miliband said the changes are essential to delivering affordable, homegrown power: “We need to go further and faster to make Britain a clean energy superpower, end our reliance on volatile global gas prices and make working people better off with homegrown power we can control.
“These reforms will give developers the certainty they need to build in Britain, helping deliver more clean power projects and supporting thousands of jobs – all part of the mission to bring bills down for good through our Plan for Change.”
The bigger picture and what’s next
Since its launch in 2015, the CfD scheme has supported 10GW of clean energy capacity, with a further 23GW contracted and expected online by 2030. The next auction, Allocation Round 7 (AR7), will be the first to operate under the new rules and is scheduled for August 2025. Results are expected by the end of the year.
