Marine Energy Wales has submitted its response to a consultation on the UK Government’s Contracts for Difference (CfD) scheme, showing broad support for the proposed refinements.
The CfD scheme is the UK’s policy for supporting low-carbon electricity generation. To date, alongside its predecessor investment contracts, it has delivered around 10GW of renewable generation, with a further 23GW contracted to become operational by 2030.
Proposed changes to the scheme aim to improve its efficiency, enable innovative technologies and support timely deployment for Allocation Round 8 (AR8).
Below we have outlined our response and thoughts on some of the key proposals.
Our Response
Overall, we support the direction of travel. A more efficient, delivery-focused CfD scheme is essential if the UK is to meet Clean Power 2030 and longer-term net zero targets. However, design choices matter. Poorly calibrated rules risk unintentionally constraining emerging technologies and geographically fixed resources that are critical to long-term system resilience.
Therefore we would like a focus on the following:
- Protect scheme integrity without sterilising future capacity:
We support measures to prevent speculative rebidding of surrendered CfD capacity, however, blanket restrictions could permanently block redeployment of site-specific resources like tidal stream. A more targeted approach is needed for nascent technologies. - Enable flexibility where it reflects real-world delivery:
Proposals such as hybrid metering, improved appeal processes, and pragmatic handling of non-material errors are welcome. These changes reduce avoidable risk without undermining competition or consumer value. - Support innovation in deep water:
We strongly welcome the creation of a new Other Deepwater Offshore Wind category. This should be implemented in a technology-neutral way, allowing innovative deep-water foundations and floating offshore wind to compete on equal terms. - Apply the Clean Industry Bonus proportionately:
Tidal stream already delivers very high UK supply-chain content and should be recognised accordingly. For capital-intensive deep-water technologies, flexibility is needed to avoid deterring investment while supply chains mature. - Do not crowd out test and demonstration:
Test and demonstration projects remain essential for cost reduction and supply-chain development. CfD design must ensure these projects are not squeezed out by larger commercial schemes. - Look beyond headline strike prices:
A resilient energy system requires diversity. Marine renewables offer predictability, complementarity with wind and solar, and system-wide benefits that are not captured by LCOE alone.
Our response is rooted in extensive engagement with developers, supply chain companies, regulators and finance bodies across Wales.
We will continue working with UK and Welsh Government to ensure the CfD scheme supports both near-term delivery and long-term system value.