Energy Regulatory Update (UK) – February

Our energy regulatory teams across Europe provide updates to clients on a regular basis. This newsletter contains a selection of recent UK news items of relevance to the energy transition and more generally to the energy and natural resources sector. It identifies developments of a policy or regulatory nature considered to be of interest by the contributors.

 

Contracts for difference scheme

Results for CfD AR7a – for technologies other than offshore wind

On 10 February 2026, the Department for Energy Security and Net Zero (DESNZ) published the outcome of the contracts for difference (CfD) allocation round 7a. This is for the non-offshore wind technologies, comprising Pot 1 (Established Technologies) and Pot 2 (Emerging Technologies). The results are set out in the CfD AR7a results table, including details of the successful applicants (developers) and projects, technology (solar PV, onshore wind and tidal stream), region, strike price, delivery year and more. The results were accompanied by a press release from DESNZ titled ‘New auction delivers unprecedented clean, homegrown power’.

Clean industry bonus scheme

The CfD Clean Industry Bonus (CIB) (formerly known as the Sustainable Industry Rewards) allows fixed and floating offshore wind CfD applicants to get extra CfD revenue support if they choose to invest in more sustainable supply chains. On 4 February 2026, DESNZ published the government’s response on its consultation commenced on 23 August 2025 on the CIB and regulatory reforms proposed for CfD allocation round 8 (AR8). The government’s response details the final policy decisions, which are summarised in the announcement as follows:

• Fair Work Charter: applicants will be required to sign up to the interim Fair Work Charter as part of the CIB minimum standards for AR8. Suppliers included in a generator’s CIB bid under Criterion 1 (shorter supply chains) will also be required to sign up to the Charter, with exemptions for small businesses and new facilities. DESNZ has issued a press release on the Fair Work Charter headed ‘Clean energy funding to be tied to stronger workers’ rights’;

• Skills: the government will proceed with the proposal to set up a collaborative skills investment fund, administered by a third party. The government will work with the offshore wind industry to establish an operational skills investment fund in 2027;

• Onshore wind: the CIB will be expanded to include onshore wind from allocation round 9, but not for AR8. Onshore Wind Minimum standards (set at GBP25 million/GW) will apply only to developers seeking CIB extra funding. Onshore Wind projects entering the CfD but not applying for CIB will not need to meet minimum standards;

• Process improvements: the government will amend statutory timelines, introduce applications per project, formalise powers to set different budget structures, clarify clauses around force majeure, extend the scheme’s sunset clause, and introduce ‘payment on delivery; and

• CfD regulation amendments: the government will amend CfD regulations so that Contract Budget Revision Notices need only be published by the time of the first CfD notification.

On 16 February 2026, DESNZ published the draft Clean Industry Bonus Allocation Framework (Framework Document) and related draft Guidance (Guidance Document) for CfD AR8. The Framework Document sets out how to apply for a CIB, and how funding will be allocated, and the Guidance Document sets out the process for receiving CIB payments, and other matters related to the delivery of CIB commitments. Both these documents will remain in draft until the underlying statutory instrument has been approved by parliament.  The CIB window is currently set to open on 13 May 2026 and will close on 21 May 2026, but this is subject to change. DESNZ will update the above CIB publication page with confirmed timelines.

 

Connections reform

On 6 February 2026, Ofgem published an ‘Update on delays to connection dates for some TMO4+ Protected Projects’, together with an update letter from Ofgem to all interested stakeholders. The update explains how, as part of the Gate 2 to Whole Queue (G2TWQ) process (which is about rationalising the existing connections queue to prioritise projects that are ‘ready’ and ‘needed’), a number of projects qualified for protection (Protected Projects), with connection dates and points of connection due to remain the same, and how, on 2 October 2025, Ofgem received a letter from the National Energy System Operator (NESO) and the Transmission Owners (TOs) informing Ofgem that they expected they would be unable to comply with elements of the Connections Methodologies as part of the G2TWQ process - this relates specifically to the requirement to issue Gate 2 offers to Protected Projects.

The NESO / TO Letter stated that if the Connections Methodologies were followed, NESO and the TOs would be compelled to issue some Gate 2 offers with connection dates which were known to be unachievable (in some cases with dates in the past) as well as inaccurate points of connection in one case, and the letter proposed that Gate 2 offers for affected Protected Projects be issued with amended connection dates (and locations in a limited number of cases), notwithstanding that this would not comply with the requirement for such offers to retain the existing terms. To allow this, the NESO / TO Letter requested relief from certain obligations in relation to the affected offers. Ofgem received from NESO and the TOs final confirmed lists of the affected Protected Projects on 23 January 2026.

The Ofgem Update Letter explains how Ofgem, at this time, will not be granting relief from NESO / TO obligations regarding delayed dates for the affected Protected Projects. Once Ofgem has a clearer understanding of the circumstances and impact regarding this issue, it will consider what, if any, further action to take. For now, Ofgem acknowledges that in some circumstances it has become necessary to issue offers that depart from the Connections Methodologies in order to prioritise prompt delivery of TMO4+ and prevent further delay to the issuing of these offers. It expects TOs and NESO to offer Protected Projects their best view of the most ambitious connection date possible.

Following a joint review with TOs and Distribution Network Operators, NESO published its ‘Connections Reform Timeline Update’ on 13 February 2026, setting out (amongst more) a revised delivery timeline for connections reform, and new information on its page ‘Understanding your offer and the support available to you’.

 

Nuclear – advanced technologies

On 4 February 2026, DESNZ published a press release titled ‘Government to unlock advanced nuclear to groweconomy’. This relates to the publication by DESNZ of the ‘Advanced Nuclear Framework’, which has the aim of stimulating private investment in innovative nuclear technologies across the country, providing a clear route to market and support for credible projects to get them off the ground. The Framework comprises an Introduction, Part One (UK Advanced Nuclear Pipeline), Part Two (Project Enablers), and a Glossary. The latter notes that, by the term ‘advanced nuclear projects’, the government means projects which seek to deploy Small Modular Reactors, Advanced Modular Reactors and Micro Modular Reactors in the UK for civil energy use. On the same day, DESNZ published guidance titled ‘United Kingdom Advanced Nuclear Pipeline: Guidance and expectations for project proposers’, and it published the ‘Statement on civil nuclear fuel use’.