Government Plans Major Shake-Up to Boost Green Energy Bids
The government is considering overhauling the Contracts for Difference (CfD) scheme — the UK’s flagship renewables support programme — to reward bidders not just on price but on wider benefits.
What’s Changing?
- New reforms could see bidders scored on “non-price factors” like supply chain sustainability, skills development, and innovation alongside their price bids.
- This approach aims to drive investment in renewables, shore up energy security, and grow the green economy.
- The move builds on success already seen, with CfD projects delivering 26.1GW of low-carbon power and slashing offshore wind costs by nearly 70% since 2015.
Why Introduce Non-Price Factors?
Currently, CfD contracts are awarded solely based on the lowest bid price for renewable projects. The government wants to shake things up by factoring in how projects contribute to the overall health of the renewable sector.
Ministers hope this will:
- Encourage investment in sustainable UK supply chains.
- Close skills gaps by supporting training for technicians.
- Boost innovation and grid flexibility.
- Strengthen energy security amid shifting global challenges.
What the Ministers Say
Graham Stuart, Minister of State for Energy Security and Net Zero, said:
“Our flagship Contracts for Difference scheme has been hugely successful in driving down costs and supporting British low-carbon electricity. But we want to go further to maximise its potential to improve energy security and help renewable developers invest in supply chains and innovation.”
“Introducing non-price factors is a smart way to grow the sector as we power more of Britain with homegrown clean energy.”
Tim Pick, Offshore Wind Champion, added:
“While price-only auctions drive innovation to cut costs, today’s climate demands we also focus on developing supply chains and jobs.”
“This nuanced approach could help the UK seize a first-mover advantage in floating offshore wind technology.”
Adam Berman, Deputy Director for Advocacy at Energy UK, commented:
“The CfD programme has secured the UK’s global leadership in low carbon tech. But rising inflation and global competition mean we must adapt to attract vital investment.”
“Incorporating new factors into CfD could boost energy security and ensure all regions benefit from jobs, skills, and supply chain opportunities.”
Next Steps
The government has launched a call for evidence on these changes to gather views from industry and experts.
If supported, detailed proposals will follow in a formal consultation. The reforms tie into the wider Review of Electricity Market Arrangements (REMA) and government ambitions to secure a green economy with tens of thousands of jobs and billions in private investment.
Last month, the government pledged a further £205 million to CfD’s fifth allocation round, adding to the millions already pushing UK green energy forward.
Watch this space as Britain powers up its renewables revolution — with rewards beyond just the price tag.
