Last edited 26 Apr 2021

Contracts for Difference

The Energy White Paper, Powering our Net Zero Future (CP 337), published in December 2020 by HM Government, defines the Contracts for Difference scheme (CfD) as: ‘The main support mechanism for large scale low-carbon electricity generation projects. Successful projects are awarded a long-term contract which secures a price to which they will either be topped up if electricity prices are low, or pay back to if electricity prices are high.’

A Contract for Difference allocation round is: ‘The competitive allocation process of CfD contracts. Participants bid the strike price they require to build their project with the cheapest ones winning on a pay-as-clear system.’

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