The government has today published key documents relating to the Contracts for Difference Allocation Round 5 and a consultation on the future of the Contracts for Difference scheme.
The AR5 documents are being published in December 2022 to provide industry and potential AR5 applicants with key information ahead of the round opening in March 2023. The documents published today are:
• AR5 Core Parameters
• Draft Allocation Framework
• Administrative Strike Price Methodology Note
• Consultation on the future of the CfD
AR5 Core Parameters
The AR5 Core Parameters confirm the pot structure, administrative strike prices, delivery years for AR5. AR5 will feature two auction pots (instead of three pots, as in AR4), with offshore wind competing alongside other established technologies in Pot 1. Newer technologies will compete in Pot 2. The shift to two pots reflects the success of the CfD scheme in helping bring down the per unit cost of offshore wind so that it is now competitive with other established technologies. Government is still committed to having up to 50GW of offshore wind by 2030, including up to 5GW of floating wind. Final budgets and further auction details will be published in the Budget Notice in March 2023. Alongside the Core Parameters, the government has published the Administrative Strike Price Methodology Note, which explains how the Administrative Strike Prices for AR5 have been set.
Draft Allocation Framework
The AR5 draft Allocation Framework document sets out the rules and eligibility requirements for the fifth CfD allocation round.
Consultation on the Future of the CfD
The government has also published a consultation that invites views on potential amendments for Allocation Round 6 (AR6) and beyond. The consultation will be open until 07 February.