• Increase of £530mn will help put the UK back on track for delivering a secure, affordable and low carbon power system. 

• Renewables are the cheapest forms of generation, with the CfD mechanism paying consumers back when the market price is above that of the wholesale price. 

• The CfD should deliver a wide range of renewable technologies that work together to deliver a secure power system. Government should not cap the amount technologies can receive so that all sectors are able to realise similar success stories to offshore wind. 

The REA (Association for Renewable Energy and Clean Technology) has today welcomed the £530mn increase to the Allocation Round 6 (AR6) budget, to a total of £1.555bn.  

This includes a £300mn increase for pot 3 (offshore wind), with a total pot of £1.1 bn. A £65mn increase for pot 1 (including solar and onshore wind), with a total pot £185mn. And a £165mn extra for pot 2 (technologies including Advanced Conversion Technologies, geothermal and marine), with a total pot of £270mn.  

The increase means the AR6 budget is 7 times higher than that of Allocation Round 5 (AR5). 

The REA is delighted to see this increase, which will help put the UK back on track for delivering a secure, affordable and low carbon power system. The Contracts for Difference (CfD) mechanism helps ensure that consumers are protected from fluctuations in the cost of generating electricity by stabilising revenue for generators and shielding consumers from volatile market prices. 

Mark Sommerfeld, Deputy Director of Policy at the REA (Association for Renewable Energy and Clean Technology), said: 

“Increasing the Contracts for Difference (CfD) budget is a critical step towards a secure, affordable, and decarbonised power system. It is reassuring to see the new Government move at speed, putting the UK back on track, and helping secure significant amounts of new offshore wind and solar capacity, in particular. These are the lowest cost forms of power generation, while also helping to underwrite UK supply chains, skills and jobs.   

With such budget increases, Government should also be utilising the CfD to deliver similar success stories across a range of renewable technologies. Government should look to remove the caps on the amount that technologies like geothermal can receive through the auction, ensuring less established technologies are also able to mature. This is critical to delivering a diverse and resilient power system for the UK and one that can meet the Government’s mission for a decarbonised power system by 2030.”