Introducing a Contracts for Difference (CfD) Sustainable Industry Reward

The government is proposing to introduce a CfD Sustainable Industry Reward (CfD SIR) from CfD Allocation Round 7 onwards.

This follows the Call for Evidence on introducing non-price factors into the Contracts for Difference scheme, for which we published the government response in September 2023.

The CfD Sustainable Industry Reward aims to help accelerate the deployment of low carbon electricity generation, specifically offshore / floating offshore wind, by addressing some of the recent challenges identified by the industry. 

The Reward could provide greater revenue support to projects that take meaningful action to increase the economic, environmental and social sustainability of offshore and floating offshore wind deployment.

It could also work with other government policies aimed at increasing the rate of deployment of offshore and floating offshore wind.

The consultation sets out:

• how the proposed CfD Sustainable Industry Reward could operate
• the kind of proposed deliverables we are seeking from this support 
• Part 1 of the consultation proposes a model to deliver the CfD Sustainability Reward
• Part 2 proposes the type of factors that could be valued under the CfD Sustainability Reward

The CfD Sustainability Reward could replace Supply Chain Plans (SCPs) for offshore wind and floating offshore wind temporarily (it doesn’t make sense to have both interventions in place together). Existing SCPs will continue to be monitored and enforced. Other technologies with projects over 300MW will still need to continue to comply with the existing SCP requirements.

The consultation is necessary to ensure that the policy could deliver optimal value to consumers as well as a prelude to legislation, though the final decision to proceed with the policy will be based on:

• responses to the consultation
• the overall fiscal situation and policy landscape
• status of the offshore wind and floating offshore wind market