The budget for the UK’s sixth renewable energy Contracts for Difference (CfD) Allocation Round (AR6) has been increased by 51.71% to £1.555 billion (~$1.91 billion) from  £1.025 billion (~$1.30 billion) allocated in March 2024.

The AR6 will be valid for five years, from financial years 2026 to 2031.

Following the increase, the AR6 budget includes:

• £1.1 billion (~$1.40 billion) for offshore wind, an increase of £300 million (~$382.08 million)
• £185 million (~$235.61 million) for established technologies such as onshore wind and solar, a rise of £65 million (~$82.78 million)
• £270 million (~$343.88 million) for emerging technologies such as floating offshore wind and tidal, an increase of £165 million (~$210.14 million).

The funding aims to accelerate the delivery of clean, affordable, low-carbon electricity to families and businesses from renewable energy technologies such as wind turbines and solar panels.

The industry will now bid for a share of the funding through the government’s sixth renewable auction—the CfD program. This program provides developers with initial subsidies for clean electricity projects across Britain, with a built-in design to keep costs low for consumers. These subsidies are paid back when wholesale electricity prices exceed the agreed CfD price.

The program awards contracts through a series of competitive auctions, where the lowest price bids are successful.

The strike price for this round has been set at £73 (~$93)/MWh for offshore wind, £64 (~$81.5)/MWh for onshore wind, and solar £61(~$78)/MWh.

Last September, the UK announced the allocation of CfDs to 95 new renewable energy projects, securing a substantial 3.7 GW of clean energy capacity in its fifth allocation round.

In 2023, the UK government pledged $2.2 billion to scale green hydrogen production.