Reforms to renewables auction will boost UK clean energy output

15 July 2025

The UK government has announced reforms to its Contracts for Difference scheme, aimed at increasing the number of clean energy projects powering homes and businesses across the country.

The updated measures are designed to expand the scope and impact of the scheme ahead of Allocation Round 7 (AR7), with the goal of securing more investment in domestic renewable energy sources such as offshore wind, onshore wind and solar. The Contracts for Difference (CfD) scheme is the government’s primary mechanism for supporting low-carbon electricity generation, offering long-term price stabilisation to energy developers.

Key changes include extending contract lengths from 15 to 20 years for major technologies, a move intended to reduce the cost burden on consumers over time while encouraging private investment by increasing revenue certainty for developers. The reforms also allow certain offshore wind projects to participate in the bidding process before receiving full planning consent, aiming to speed up delivery and enhance market competition.

In addition, the way auction budgets are set will be adjusted. The Energy Secretary will now be able to review developer bids before finalising budget decisions, with the intention of improving value for money while maintaining ambitious clean energy targets.

Energy Secretary Ed Miliband:

“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 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.”

Since its introduction in 2015, the CfD scheme and earlier investment contracts have helped deliver 10 gigawatts (GW) of clean energy, with another 23GW contracted for development by the end of the decade. The latest round of changes is expected to facilitate projects like the Moray West offshore wind farm in Scotland, which has reportedly created around 1,500 jobs and supplies electricity to the equivalent of half of Scottish households.

Full details of the upcoming AR7 timelines for offshore and non-offshore technologies are available via the Department for Energy Security and Net Zero.