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CfD Stakeholder Bulletin — January 2019

DESNZ·guidance·medium·21 Jan 2019·source document

Summary

Government published draft Allocation Framework for CfD Allocation Round 3 (AR3), introducing an overall capacity cap applicable to all technologies for the first time. The framework adds Remote Island Wind to Pot 2 (less established technologies) and updates eligibility requirements for fuelled technologies. The round is planned to open by May 2019, with the final framework published no later than 10 working days before.

Why it matters

The capacity cap represents administrative rationing of renewables deployment rather than price-based allocation — projects compete for limited slots rather than clearing at market prices. This favours developers with superior applications and due diligence over those offering better value, as such creating barriers to entry for smaller developers.

Key facts

  • Overall capacity cap introduced for AR3 subject to State aid approval
  • Remote Island Wind added to Pot 2 (less established technologies)
  • Round planned to open by May 2019
  • Final framework published maximum 10 working days before opening

Timeline

Effective date1 May 2019

Areas affected

cfdrenewables

Related programmes

CfD
Memo

Contracts for Difference: Stakeholder Bulletin 21st January 2019 Publication of the draft Allocation Framework for the Third Allocation Round, 2019 • On 21st January, the government published the draft Allocation Framework for the Third Allocation Round, 2019. • The draft Allocation Framework is a technical document, which sets out the rules that will apply to the third Contracts for Difference (CfD) allocation round for less established technologies. It also sets out how applications will be considered against the eligibility requirements and includes a list of checks that the EMR Delivery Body (National Grid) carries out when assessing CfD applications. • The final Allocation Framework will be published no later than 10 working days before the round opens (which is planned to open by May 2019). The main changes being made to the Allocation Framework from previous CfD allocation rounds include: • The inclusion of a capacity cap and how it will operate. A capacity cap is a limit on the total capacity of projects that can be awarded CfD contracts and is applicable to all technologies. The use of an overall capacity cap for the Third Allocation Round is subject to State aid approval, which is expected to be received by the start of the round. • The inclusion of Remote Island Wind as a technology type within “Pot 2” (less established technologies). • Other technical changes to the draft Allocation Framework have also been made to incorporate updates to the eligibility requirements for fuelled technologies. Draft Allocation Framework for the Third Allocation Round, 2019: https://www.gov.uk/government/publications/contracts-for-difference-allocation-framework-for-the- third-allocation-round-2019 General Data Protection Regulation This stakeholder bulletin is being circulated to people who have opted in to the Contract for Difference stakeholder contact list. We issue these stakeholder bulletins as a convenience to interested parties, however it is not in any way essential to be on this list to participate in major consultations or allocation rounds. Purpose & scope of this list: This list is managed by the Department for Business, Energy and Industrial Strategy (BEIS) (and any successor departments) and will be used to inform interested parties of policy developments relevant to the Contract for Difference scheme for renewable energy projects (and any direct successor schemes). It is not used for any other purposes. To be removed from the circulation list: Please send a blank e-mail with the subject ‘opt out’ (if the receiving e-mail you use is different to the one you send the e-mail from, include that e-mail address in the subject of the e-mail) to BEISContractsForDifference@beis.gov.uk. If you have received this indirectly and want to be added to this list: Send a blank e-mail with the subject line ‘opt in’ to BEISContractsForDifference@beis.gov.uk. You can withdraw your consent to opt in at any time. We will normally keep your address on this list until you: a) withdraw your consent to opt in, b) the scheme closes without any successor, c) we receive reports your email address is no longer operational, or d) you do not respond to a periodic request from us to reconfirm your desire to opt in.