Contracts for Difference (CfD) Allocation Round 7: Subsidy Control Transparency Database estimates
Published 14 April 2026
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This document includes more information on the estimates used for the subsidy amount for Contracts for Difference (CfD) Allocation Round 7 on the Subsidy Control Transparency Database.
CfDs are 15-year or 20-year contracts in which renewable generators receive a variable payment between their agreed ‘strike price’ (the price (£/MWh) they receive in the Allocation Round) and the ‘reference price’ (a measure of the market wholesale electricity price). CfDs have historically been 15-year contracts, however for Allocation Round 7 the following technologies were awarded 20-year contracts:
- fixed bottom offshore wind
- floating offshore wind
- onshore wind
- solar
The total subsidy a generator will receive is the total of the variable payments over the contract period. Subsidy cost estimates are inherently highly uncertain because they depend on future wholesale electricity prices and on how much electricity individual projects generate. Generation depends on future weather conditions (for wind and solar), while wholesale prices depend on bidding behaviour across the market by all generators in each price period.
Subsidy amount estimates
For the purposes of the entries on the Subsidy Control Transparency Database, we have estimated a subsidy amount using the ‘valuation formula’ and associated assumptions set out in the AR7 Allocation Framework. On the database, there is an overall estimate for Allocation Round 7 and individual estimates for each project which has a contract and will therefore likely receive a subsidy. Uncertainty is greater for project level estimates than for the total. Project specific variables including future load factors will have a significant impact on future subsidy which will impact the accuracy of the estimate. Given the uncertainty of estimating project-level subsidy costs, due to project-specific variables such as load factors, the estimates have been rounded to the nearest £1 million.
The total subsidy amount for Allocation Round 7 has been rounded to the nearest £5 billion to reflect the inherent uncertainty with the estimate. The sum of the individual estimates may therefore not sum to the total estimate of the Allocation Round. Importantly, the total subsidy amount is not the same as the net impact on consumer bills of Allocation Round 7, and in particular, does not reflect the offsetting downward pressure that renewables place on the wholesale price. In general, UK household electricity bills are determined by many factors including international gas prices, the different technologies that generate electricity, investments in the electricity network and how households use electricity.
These estimates are presented in a 2024 price base and are undiscounted.