The contracts for difference (CfD) regime is a UK government policy aimed at providing renewable projects with a fixed price for the renewable electricity they generate. The CfD was introduced in 2015 following the Electricity Market Reform programme, as part of a number of changes to the way in which the electricity markets work in the UK. The CfD is administered by the Low Carbon Contracts Company (LCCC). Potential projects access a CfD contract through bidding as part of an annual (or as otherwise determined by the government) auction process to access budget pots for particular technologies. Generally, technologies are grouped into established and less established groups, however the government has the discretion to allocate specific budget to specific technologies as a more granular level. Projects that win a CfD contract are eligible to receive payments from the LCCC and obliged to make payments to the dependent on the electricity price such that, when such payments are combined with income from electricity sales, the project receives a fixed price for fifteen years.
Region / Country: United Kingdom
