Unsuccessful in Contracts for Difference (CfD) Allocation Round 8 (AR8)? You still have options

Applicants for Contracts for Difference (CfD) Allocation Round 8 (AR8) will be notified of the outcome of their qualification assessment on 16 September 2026 by NESO (in its role as the Electricity Market Reform (EMR) delivery body).

For any applications that are unsuccessful, applicants will have until just the following Wednesday (23 September 2026) to request a review of that decision by NESO, which includes setting out the grounds of dispute in detail.

What is the review process?

Where an applicant disagrees with NESO’s decision, it may request a review by NESO, which is known as a Tier 1 appeal (also referred to as a Non-Qualification Review or Tier 1 review).

Applicants must set out the reasons why NESO has erred in its decision. NESO will then reconsider the decision it has taken. It is possible to come out the other end of the Tier 1 appeal stage with a revised decision that you have qualified, but this did not happen in every instance in Allocation Round 7 (AR7) and, as a result, many decisions went through to the next stage of appeal.

What happens if the NESO Tier 1 appeal does not result in a change to NESO’s non-qualification decision?

The rejected applicant can then ask Ofgem to consider the decision and make a determination (a Tier 2 appeal). In considering a Tier 2 appeal, Ofgem reviews whether NESO correctly applied the Contracts for Difference Regulations and the Contracts for Difference Allocation Framework.

Where Ofgem then upholds the NESO decision, the options narrow. The final recourse is an appeal to the High Court or, in Scotland, the Court of Session.

Lessons learned

AR7 resulted in a blockbuster year for the CfD review and appeals processes, with 33 appeals going all the way to Ofgem. This process resulted in a particularly intense and disruptive workload for NESO and Ofgem, with recurring delays in terms of the time required by Ofgem to make its final decision on these appeals. In terms of the impact of this task, this process eventually resulted in over 400 pages of decisions by Ofgem. Significant human and external resources were likely spent on those 400 plus pages.

Part of the challenge with AR7 was that the application and appeals process was far from smooth, with complications ranging from rules being rigidly applied by NESO, to technical complications for applicants in the NESO portal. The decision making by NESO was also not always consistent – we were aware of instances where some applicants were rejected for submitting the same information that successful applicants had also submitted. NESO appears to have recognised this, with a revised power now allowing it to revisit its qualification decisions in certain circumstances.

The rules underpinning AR8 have recently been updated to try and minimise the prospect of lengthy appeal processes. For example, there is now a mechanism allowing applicants to correct small errors or submit additional documentary evidence during a Tier 1 appeal, where that evidence addresses a non-material error or omission. However, the question remains why certain non-material omissions should ever lead to a non-qualification outcome by NESO in the first instance if they can be resolved in a pragmatic and common-sense manner by NESO without significant delay.

Overall, the policy intent of the CfD scheme (to encourage renewable generation, limit costs for consumers, and enhance competition) has been limited in the past by a conservative framework of rules and a conservative application of them. Although steps have been taken since AR7 to further address this issue, we still expect to see a number of appeals arise in AR8. Those appeal processes mean the time taken to sign AR8 contracts could be delayed by at least 10 weeks and probably longer.

How we can help

Receiving an unsuccessful decision in applying for a CfD can come as a shock. The following is worth bearing in mind:

Time is of the essence – the time you have available to request a Tier 1 appeal (and set out in detail the reasons why your decision should be changed) is limited to just five working days, and requires careful thought. It is therefore important to get off to a fast start and ensure you submit your Tier 1 appeal with your best foot forward. This is the surest way to mitigate the risk of having to then go through the Tier 2 appeal process and beyond. Legal advice should be sought to bolster your chances.
Pre-Requisites – the NESO and Ofgem appeal processes are also subject to a number of requirements that must be respected in order to ensure any appeal is successful, which we are well-versed in. Failure to uphold these will result in your appeal being struck out.
Lines of arguments – there are strict limits on how much and what information you can include in the Tier 1 and Tier 2 appeal processes. We’ve prepared successful appeals for a number of applicants (both at Tier 1, Tier 2, and beyond) and have experience in what will work in making arguments to NESO and Ofgem as to why your application should be reinstated. Several members of our team are ex-Ofgem and have worked closely with NESO over the years.

If you would like us to answer any specific questions regarding the appeal process, or help conduct an appeal for you on your behalf (whether at the Tier 1 stage, Tier 2 stage, or beyond), please do not hesitate to get in touch with a member of our Clean Energy team.

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