Contracts for Difference Allocation Round 8
Also known as: AR8, Allocation Round 8, CfD Allocation Round 8, Contracts for Difference Allocation Round 8, UK AR8, UK CfD AR8, Great Britain CfD Allocation Round 8
Read the full analysis →(58 min read)
AR8 is being launched into a more confident market than AR7: AR7’s 8.4 GW offshore-wind result (14 January 2026), AR7a’s 6.2 GW non-offshore-wind result (10 February 2026), and LCCC’s AR7 contract signing milestone (25 March 2026) reduced immediate procurement pressure and helped DESNZ bring AR8 forward from autumn to July 2026 under the Clean Power 2030 mission. The round opens against enduring 2030 policy targets of 50 GW offshore wind and 5 GW floating offshore wind, with a pipeline spanning Crown Estate Round 4, Celtic Sea Round 5, ScotWind and INTOG, and with first potential ODOW participation. Its launch conditions are also shaped by the CIB statutory base, SI 2025/903 bid-visibility rules, Employment Rights Act 2025 / Fair Work Charter context, NESO Connections Reform, and the AR8-specific statutory instruments and CMA SAU CIB scrutiny scheduled around spring 2026.
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Sealed · single-round
Clean Industry Bonus + Contract for Difference
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Clause 5.1 of the draft Phase 1 (Apportioned) Agreement provides that the Initial Target Commissioning Window is one year, commencing on the specified date. The standard terms add that the Start Date in a Start Date Notice must be no earlier than the first day of the Target Commissioning Window (Condition 3.21A(B)).
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20 years
CPI
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The 'Intermittent Difference Amount' is zero (0) for any and all Settlement Units forming part of an 'Intermittent Negative Price Period' (definition in Condition 17). 'Intermittent Negative Price Period' means any period of one (1) or more Settlement Units in respect of which the Intermittent Market Reference Price is negative (less than £0/MWh).
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Part 11 (Curtailment) of the Conditions applies to the CfD. The curtailment regime is set out in Conditions 48-50, including compensation for Qualifying CPC Events, and billing can include amounts payable by either the CfD Counterparty or the Generator in respect of Curtailment Compensation Shortfall or Curtailment Compensation Excess. The detailed compensation formula is in Part 11 / related definitions rather than the CIB allocation framework extract.
Extra-proposal CIB payments are only payable to the extent the relevant commitments are delivered: partial delivery may result in partial CIB payment and non-delivery may result in no CIB payment for that commitment. Minimum standards must still be met regardless of whether any extra-proposal funding is awarded (Allocation Framework paragraph 6.9). If CIB Minimum Standards are not met in full, the Generator must pay the Facility CIB Minimum Standard Performance Amount under Schedule 2, paragraphs 5.1-5.2.
The Clean Industry Bonus (CIB) provides extra or enhanced Contracts for Difference (CfD) revenue support, described in Schedule 2 as a sustainable industry reward, to eligible generators that invest in the economic, social and environmental sustainability of their supply chains. Applicants may seek further revenue support through competitive 'CIB extra proposals' under criteria including shorter supply chains or cleaner supply chains. Eligible generators successful in the primary or secondary allocation of the CIB budget, and successful in the relevant CfD allocation round, may receive CIB payments upon successful delivery of the investments specified in their CIB extra proposal(s).
A Contract for Difference (CfD) is the Government's policy instrument for incentivising new low carbon electricity generating projects in Great Britain. It is entered into following the applicable contract allocation or negotiation process established under or by virtue of the Energy Act 2013. The contract comprises the CfD Agreement together with the FiT Contract for Difference Standard Terms and Conditions; one source describes it as a private law contract between a generator and the Low Carbon Contracts Company, while the standard terms refer to the CfD Counterparty. Variants mentioned include phased projects, including a Phase 1 agreement for the first phase of a Phased Project, private network generators, and unincorporated joint ventures.
→ Failure to satisfy Milestone Requirement may trigger Termination under Part 12 of the Standard Terms and Conditions; collateral may be drawn on; 20-year CfD clock continues to run (erodes subsidy period day-for-day).
→ Late commissioning past TCW end erodes subsidy period day-for-day (20-year clock already running); OCPs must be satisfied before Longstop Date to avoid Termination.
→ Termination by LCCC if Operational Conditions Precedent are not satisfied; Termination Amount calculated per Annex 1 of the Standard Terms and Conditions.
→ CIB Minimum Standard Performance Amount payable to LCCC (deducted from CfD payments, capped at SP × MO per Instalment Interval); CIB Extra Investment Reward Amount forfeited pro-rata for undelivered share; Fair Work Charter withdrawal by generator or service-provider results in CIB payments ceasing.
TCW: Clause 5.1 of the draft Phase 1 (Apportioned) Agreement provides that the Initial Target Commissioning Window is one year, commencing on the specified date. The standard terms add that the Start Date in a Start Date Notice must be no earlier than the first day of the Target Commissioning Window (Condition 3.21A(B)).
Late delivery: Extra-proposal CIB payments are only payable to the extent the relevant commitments are delivered: partial delivery may result in partial CIB payment and non-delivery may result in no CIB payment for that commitment. Minimum standards must still be met regardless of whether any extra-proposal funding is awarded (Allocation Framework paragraph 6.9). If CIB Minimum Standards are not met in full, the Generator must pay the Facility CIB Minimum Standard Performance Amount under Schedule 2, paragraphs 5.1-5.2.
Eligible generator must contribute the industry-agreed sum / full industry agreed contribution set by the Offshore Wind Growth Partnership toward the Industrial Growth Plan Delivery Body as part of the financial minimum standards. For Allocation Round 8, the agreed sum is £10m per GW, as set out in the OWIC 2025 Charter. The contribution may, at the applicant's discretion, count toward the total minimum standard spend.
GBP 10,000,000 GBP per GW
Trigger: By the time the generator applies for an implementation statement and in any event before the Investment Final Date; within the timelines expected by the Offshore Wind Growth Partnership, with confirmation that the IGP contribution has been made required as evidence.
Single application-window process for the Clean Industry Bonus. Eligible generators submit one CIB application per project and applications must not contain more than one technology (paragraph 4.4). A CIB application may include minimum standards proposals and between one and fifteen CIB extra proposals (paragraphs 3.4, 9.1). DESNZ assesses applications after the window closes, scores eligible extra proposals, ranks them, and allocates the CIB budget (sections 8, 13, 15, 17).
Stop: The CIB application window is open for 7 working days; after closure DESNZ assesses, scores, ranks and allocates budget (paragraph 4.6; sections 13, 15 and 17).
Selection: Ranking by normalised score across all eligible CIB extra proposals, with tiebreak rules in paragraph 15.3 and budget allocation in rank order under section 17.
Only offshore wind generators and floating offshore wind generators are eligible for the CfD Clean Industry Bonus in Allocation Round 8; no other technologies are eligible (paragraph 2.5).
Eligible generators of fixed and floating offshore wind must hold and provide a CIB Statement by the Secretary of State to NESO (as Delivery Body) and LCCC in order to be eligible to enter or qualify for CfD Allocation Round 8.
Applicants must contribute their own funding to at least one sustainability criterion, and total investment across all CIB minimum standards proposals must be at least £100m per GW for fixed bottom offshore wind or at least £50m per GW for floating offshore wind, indexed as per section 20 (paragraphs 6.1(i)-(ii), 8.4(ii); guidance section 1.2).
The eligible generator must contribute the industry agreed sum to the IGP Delivery Body; for AR8 this is £10m per GW as set out in the OWIC 2025 Charter (paragraph 6.1(iii)). Guidance describes this as part of the CIB Financial Minimum Standards before revenue support can be unlocked.
The eligible generator and, where relevant, UK-based or nominated/contracted service providers must be signatories of the interim Fair Work Charter no later than the day the CIB application window closes (paragraphs 6.1(iv), 6.12-6.16, 8.4(iv)). Other source documents also describe participation or sign-up by relevant suppliers, ports and installers for AR8.
For a proposal to meet Criterion 1 at the time of application, the investment recipient must be a manufacturing facility, installation firm or port; be located in a UK deprived area; and be a signatory of the interim Fair Work Charter, subject to the exemptions in paragraph 11.3. Another source states exemptions are granted to small enterprises (≤50 staff) and new facilities in AR8.
For a proposal to meet Criterion 2 at the time of application, the investment recipient must be a manufacturing facility or installation firm and be owned or operated by manufacturers that can evidence having set or committed to a Science Based Target by the first day the CIB application window is open (paragraphs 12.2-12.3).
All relevant information required under paragraph 10.1 must be provided, and all information must be truthful and accurate to the best of the eligible generator's knowledge (paragraphs 10.3-10.4; paragraph 13.16).
Under 'Additional Requirements', the document lists: 'Commitment to agreed investments via funding agreements.'
Applications should continue to be disqualified where essential documentary evidence and information has not been submitted by the application deadline, provided that the evidence or information existed and was in the applicant’s possession at the time of submission.
Projects must not include capacity previously awarded a CfD in a prior allocation round and later surrendered through Permitted Reduction and/or Final Installed Capacity flexibilities; the Government proposes to retain this excluded-application restriction for AR8 and subsequent allocation rounds, applying to projects from allocation rounds 1-7.
The vast majority of CfD generators are required to have obtained a valid connection agreement enabling electricity generation from the proposed CfD Unit to be supplied to the transmission system, the distribution system or a private network in order to be eligible for a CfD.
The required connection agreement must stipulate a connection date which occurs either on or before the Target Commissioning Date specified in the application by the generator.
All applicants must have a Gate 2 connection agreement to be eligible to apply for a CfD; projects holding only a Gate 1 connection agreement, including 'Gate 1 with reservation' connection agreements, do not satisfy the requirement.
For AR8, applicants for Other Deepwater Offshore Wind (ODOW) would have to demonstrate to the Delivery Body (NESO) that their project is expected, by the Target Commissioning Date, to have satisfied the conditions set out in the ODOW definition.
ODOW projects will not be eligible to apply as an Unconsented Project; only fixed-bottom offshore wind projects may apply as an Unconsented Project.
Method: quantitative formula
Unit: normalised score
Method: quantitative formula
Unit: normalised score
- criterion 1 tie higher investment wins — If tied proposals are all Criterion 1 bids, rank them according to the amount of investment the eligible generator proposed to make, from highest to lowest amount of investment committed (paragraph 15.3.1).
- criterion 2 or mixed tie lower support request wins — If tied proposals are all Criterion 2 bids, or a mixture of both criteria, rank them according to the amount of extra CfD revenue support required through the Clean Industry Bonus, with proposals requiring less support ranked above proposals requiring more support (paragraph 15.3.2).
- electronic random assignment — If proposals cannot be separated by the earlier tiebreakers, rank them at random using an electronic random assignment process (paragraph 15.3.3).
Legal basis: Framework prepared under the Contracts for Difference (Allocation) Regulations 2014 and the Electricity Market Reform (General) Regulations 2014, as amended (paragraph 2.1). Document remains draft until underlying legislation has been approved by parliament.
Legal basis: Referenced throughout drafting notes as issuing the CfD Standard Terms Notice under regulation 9 of the Contracts for Difference (Standard Terms) Regulations 2014. Contracts for Difference (Allocation) Regulations 2014 regulation 28E; Electricity Market Reform (General) Regulations 2014 including regulation 12E, as cited in sections 2.9A, 2.10, 6.2 and footnotes. Issued the standard terms and conditions in accordance with section 11(1) of the EA 2013.
Legal basis: Throughout the document NESO is identified as the Delivery Body responsible for assessment of CfD applications, issuing qualification and non-qualification determinations, correcting Delivery Body errors where provided for in the Contract Allocation Framework, and determining Tier 1 reviews. Described in the document as the CfD Delivery Body; also responsible for connection reform and Schedule 5 eligibility assessment proposals referenced in the consultation.
Legal basis: Background (C)-(E): enters into the CfD solely for the purpose of implementing the provisions of the EA 2013; the agreement is a CfD Agreement for the purpose of the Conditions. Makes the offer to contract pursuant to section 14 of the EA 2013 and enters into the CfD Agreement with the Eligible Generator (Preliminary (B)).
Legal basis: Reviewing body for the referral under the Subsidy Control Act 2022 context described in DESNZ Assessment — Scope Referred.
Legal basis: Defined in Definitions; functions described in AR8 Fair Work Charter dispute resolution and AR8 Fair Work Charter Dispute Resolution Process.
Legal basis: The document identifies Ofgem as the Tier 2 appeal body; Regulation 49 amendments would also clarify pending status before possible appeal to the High Court or Court of Session. The document states Ofgem is referred to as the Authority in the Allocation Regulations and hears Tier 2 qualification appeals.
>= £100m/GW for fixed-bottom offshore wind or >= £50m/GW for floating offshore wind
>= £10m/GW mandatory contribution to the OWGP as IGP Delivery Body
Max = SP × MO