This briefing covers background to the contract for difference mechanism for supporting low carbon power.
Support for low carbon power (180 KB , PDF)
The Government’s primary mechanism for supporting new low carbon power infrastructure is known as the contract for difference (CfD) scheme.
CfDs work by guaranteeing a set price for electricity – known as a strike price – that generators receive per unit of power output. As the wholesale price of electricity fluctuates, the generator is either paid a subsidy, or pays back, so that they always receive the value of the strike price. The cost, or benefit, is passed on to consumer bills.
The technologies that have been able to compete for CfDs have been subject to policy changes. The Government has announced a consultation on changes to the CfD scheme, which would mean a wider mix of technologies, including onshore wind, will be able to compete for contracts.
Support for low carbon power (180 KB , PDF)
The Government’s Energy Bills Support Scheme will provide a £400 discount on electricity bills to help households with the rising cost of energy. This briefing summarises the policy, first announced in February and updated in May and July 2022, as well as the reaction to it. It also provides information on eligibility for the scheme and answers to frequently asked questions.
This Library briefing gives an overview of the way that the profits from North Sea oil and gas production are taxed, and how the fiscal regime that applies to North Sea oil and gas production has been reformed in recent years
Household energy bills increased by 54% in April 2022, a record increase, and are likely to rise substantially again in October. This briefing looks at how and why prices have changed.
