Changes in the contracts for the difference (CFD) schedule will replace the monetary budget that is applied to allocation rounds by a ‘capacity ambition’.
The British government has announced reforms in the CFD mechanism that will come into force in the coming allocation round seven (AR7). It consulted various proposals at the beginning of this year.
To adapt to the capacity goals set out in its Clean Power 2030 Action Plan (CP30), at least 12 GW must be protected in AR7, AR8 and possibly (depending on the bet speed) AR9.
To accelerate this, the communication from the contract budget is published after the contract notification process has been carried out, instead of at the start of a allocation request window as before.
Instead of a budget, the government will publish a capacity ambition for the AR7 contract notification process and publish a front schedule for future allocation rounds.
In the coming months, the government said it will provide clarity about how capacity ambition will work with other auction parameters.
The change is intended to give energy secretary Ed Miliband more control over the budget, able to make it more efficient with certainty of the capacity to be protected via the auction.
The State Secretary would have more information with regard to the budget under the changes, as a result of which Miliband can also view anonymized bid information via the delivery body (which in AR7 will be the National Energy System Operator (NESO)). This supervision would inform the final budget decision.
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