DESNZ publishes 2024 CfD and CM scheme update
The Department for Energy Security and Net Zero (DESNZ) has published its annual update to Parliament on the government’s progress with the policy mechanisms implemented under the Electricity Market Reform programme. The update focuses on four key mechanisms: the Contracts for Difference (CfD) scheme, the Capacity Market (CM), the Electricity Demand Reduction pilot, and the Emissions Performance Standard. Following the general election in July 2024, the CfD scheme was allocated a £1.5bn budget for its sixth allocation round (AR6), resulting in a record 128 projects being awarded contracts, delivering 9.6 gigawatts (GW) of new low-carbon capacity. Preparations for AR7 are ongoing, and the government is collaborating with industry to further expand the CfD scheme to achieve the 2030 clean power target. The Capacity Market (CM) secured 42.8GW of electricity capacity for 2027/28 and 7.64GW for 2024/25, with rule changes implemented to support auction liquidity. No significant developments were reported for the Electricity Demand Reduction pilot or the Emissions Performance Standard.