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Contracts for Difference auction drifts into the slow lane

The third competitive Contracts for Difference allocation round will proceed along one of the slower of five possible tracks within its timetable, the delivery body has announced.

The fastest two have now been ruled out after the electricity system operator (ESO) at National Grid announced it will undertake a review of non-qualifying projects.

It means the auction itself will now kick off on 16 August at the earliest, in which case the results would be revealed on 22/23 August.

The latest the auction could begin is 16 October. If the allocation round took this track, then the results would not be known until 5/6 November.

The ESO said it will inform applicants of the outcome of the review by 30 July.

Responding to a question in parliament earlier this month, acting energy and clean growth minister Chris Skidmore said the government would not increase the 6GW cap on procurement.

Annual subsidies of £65 million will be allocated in the auction. Industry experts have suggested it may be the first to date to see offshore wind projects clear at subsidy-free prices.

Three offshore windfarms secured contracts in the most recent allocation round in 2017 – two at a strike price of £57.50/MWh and a third a strike price of £74.75/MWh (2012 prices).