Referral of the proposed Contracts for Difference Clean Industry Bonus Subsidy by the Department for Energy Security and Net Zero
The Subsidy Advice Unit (SAU) has published a report providing advice to the Department for Energy Security and Net Zero (DESNZ) concerning its proposed Contracts for Difference Clean Industry Bonus subsidy scheme.
Administrative timetable
| Date | Action |
| 20 December 2024 | SAU’s report published |
| 25 November 2024 | Deadline for receipt of any third-party submissions (submissions after this date may not be taken into account) |
| 8 November 2024 | Beginning of reporting period |
Final report
20 December 2024: The SAU has published its report providing advice to DESNZ concerning the Contracts for Difference Clean Industry Bonus subsidy scheme. The report sets out the SAU’s evaluation of DESNZ’S Assessment of Compliance of its proposed scheme with the requirements set out in the Subsidy Control Act 2022.
- Final report (20.12.24)
Request from DESNZ
8 November 2024: The SAU has accepted a request for a report from DESNZ concerning the proposed Contracts for Difference Clean Industry Bonus Subsidy Scheme. This request relates to a Subsidy Scheme of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of the DESNZ Assessment of whether the subsidy scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the scheme provided by DESNZ
The Contracts for Difference (CfD) scheme has existed since 2014 and aims to encourage low carbon electricity generation. CfDs are long-term (15-year) contracts between a low carbon electricity generator and the CfD counterparty, the Low Carbon Contracts Company. The Clean Industry Bonus (CIB) is an addition to the CfD scheme, which is planned to be implemented for Allocation Round 7 (AR7).
The aim of the CfD CIB scheme is to help de-risk (and so accelerate) the deployment of low carbon electricity generation, specifically offshore wind and floating offshore wind, by addressing supply chain issues that can hinder, or are hindering, the construction of projects. The CfD CIB scheme will provide greater revenue support through the CfD to offshore wind projects that choose to invest in the economic, environmental and social sustainability of offshore wind and floating offshore wind supply chains, thereby addressing some of the supply chain issues identified.
Eligible technologies are: floating offshore wind and fixed-bottom offshore wind. CIB support will be awarded following a competitive allocation round ahead of the main CfD round, and the lowest bids are accepted until the maximum budget for the allocation round is reached.
The first CIB allocation round is planned to open for applications in 2025. The criteria against which Bonus funding may be awarded will focus on the economic, environmental and social sustainability of supply chains.
Note on the budget for the scheme provided by DESNZ
The CIB budget will be the maximum amount of subsidy available to developers for AR7. There are a variety of factors that determine the precise quantum of the CIB budget ahead of each allocation round, including the need to balance ambition/impact against incentivising competitive tension and protecting consumer value for money. The indicative CIB budget will be published alongside the CIB Allocation Framework, both must be released 3 months before the CIB opens for applications (date TBC).
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the Contracts for Difference Clean Industry Bonus Subsidy Scheme please send your comments on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
The SAU will only take your submission into account if it can be shared with the DESNZ. The SAU will send a copy of your submission to the DESNZ together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to make or modify the scheme or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with the DESNZ using the email address provided above.
The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
- CMA press team: 020 3738 6460 or [email protected]
Updates to this page
Published 12 November 2024Last updated 20 December 2024 + show all updates
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Final report published.
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First published.