UK Gov’t Tweaking CfD Rules Ahead of 8th Allocation Round, Proposes ‘Other Deepwater Offshore Wind’ Category

The UK government has launched a consultation on proposed refinements to the Contracts for Difference (CfD) scheme ahead of Allocation Round 8 (AR8) and future rounds, including targeted changes to the terms concerning offshore wind and floating wind projects.

The consultation, published by the Department for Energy Security and Net Zero, seeks industry feedback on contractual and eligibility adjustments, some of which are intended to reflect the increasing scale and complexity of offshore wind developments, specifically floating and other deepwater projects.

For floating offshore wind, the government is proposing changes to CfD contract terms to better align with the technology’s development timelines. These include a proposed extension of the Longstop Period to give floating wind projects more time to commission and avoid termination of their CfD contract.

The government also wants to lower the Required Installed Capacity (RIC) threshold for floating offshore wind projects.

Currently, all CfD technologies are required to deliver a minimum of 95 per cent of the capacity they have contractually agreed to install, except for (fixed-bottom) offshore wind, whose RIC is set at 85 per cent to reflect the construction risks, such as encountering unsuitable seabed conditions after work has commenced. As floating wind projects, which were so far in the range of 100 MW, have grown in scale and complexity, the government plans to apply the same RIC requirement as for fixed-bottom offshore wind.

Beyond the standard definition of floating wind, the consultation also proposes the introduction of a new CfD technology category: Other Deepwater Offshore Wind (ODOW). This category would enable offshore wind projects using non-standard or innovative foundation solutions in deepwater locations to compete for CfD support.

The CfD scheme currently supports two categories of offshore wind technology: fixed-bottom offshore wind and floating offshore wind, with the regulations in use (Allocation Regulations 2014) considering only the foundation designs that float to be floating offshore wind. With the ODOW category, the government wants to make room for the novel hybrid foundation designs, “which may be suitable for deepwater deployment but do not technically float and would therefore not be considered eligible as ‘floating foundations’ under the existing legal definition of ‘floating offshore wind’.”

The proposed refinements are intended to ensure the CfD scheme remains fit for purpose as offshore wind technologies evolve, while maintaining investor confidence and supporting timely project delivery.

The consultation on the proposed changes is open until 30 January 2026, with any agreed changes expected to inform the design of Allocation Round 8 and subsequent CfD auctions.

The UK government launched the seventh CfD Allocation Round (AR7) in August this year, with a total budget of GBP 1.08 billion (approximately EUR 1.24 billion) for offshore wind and floating wind.

According to the official schedule, sealed bids for offshore wind projects in AR7 were to be submitted between 11 and 17 November, with the results expected on 14 January 2026.

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