Additions to the CfD contract arising from the introduction of the Clean Industry Bonus (formerly known as Sustainable Industry Rewards)
This consultation is open for responses
Respond to this consultationSummary
DESNZ proposes additions to CfD contracts to enable the Clean Industry Bonus mechanism, which provides extra revenue to offshore wind projects that meet supply chain sustainability criteria. The draft contract terms set out notice requirements, payment terms, and performance-related adjustments for non-delivery. The bonus operates within the existing CfD structure rather than as a separate support mechanism.
Why it matters
This adds administrative complexity to CfD contracts without changing the fundamental allocation mechanism — projects still compete on strike price, with the bonus as an overlay for those meeting sustainability criteria. As such, it favours developers with established UK supply chains over pure cost competition, potentially raising the effective cost of offshore wind support.
Key facts
- •Applies to offshore wind and floating offshore wind in CfD Allocation Round 7
- •Bonus payments subject to performance-related adjustments for non-delivery
- •Contract terms include indexation and interest provisions
- •Previously called Sustainable Industry Rewards
Areas affected
Related programmes
Memo
Summary We are seeking views on the proposed additions to the Contracts for Difference contract relating to the Clean Industry Bonus (CIB), formerly known as Sustainable Industry Rewards. Consultation description The government is proposing additions to the Contract for Difference contract, specifically the changes required to include the CIB in the contract. The CIB works within the Contracts for Difference (CfD) mechanism to competitively allocate extra revenue support (“a bonus”) to offshore wind and floating offshore wind applicants who take meaningful action to increase the social, environmental and economic sustainability of the supply chain. Successful generators will be subject to the conditions and rules set out in the CIB Allocation Framework, CIB Guidance, and the proposed draft additions to the CfD contract. The proposed additions will: * enable the CfD CIB mechanism to operate through the CfD contract, * asks the generator to comply with all outlined notice requirements, * set the rights and obligations arising from the CIB, CIB payment terms, and how performance related adjustments will operate in cases of non-delivery. * allows the CfD counterparty, the Low Carbon Contracts Company to act on the contents of the generator’s CIB Implementation Statement, including any Performance Related adjustments, and, * sets out how indexation and interest will work, and how CIB payments will work alongside a generator’s CfD payments. The proposed drafting changes are shown as tracked amendments in the CfD Standard Terms and Conditions, published alongside the consultation document. We welcome responses from anyone with an interest in the proposals, in particular those considering participating in the first CIB round ahead of Allocation Round 7. Note that the regulations and the Contract still refer to the policy as the Sustainable Industry Rewards. For the avoidance of doubt, these are the same but the legal terminology will have to continue referencing the old policy name to an extent given it is set out in regulations. Read the [consultation documents on GOV.UK](https://www.gov.uk/government/consultations/additions-to-the-cfd-contract-arising-from-the-introduction-of-the-clean-industry-bonus).