CfD and capacity market auctions set back

CfD auction delayed until August to allow Ofgem to assess qualification appeals

The auction for the second round of the contracts for difference (CfD) subsidy scheme has been delayed until August to allow time for Ofgem to assess qualification appeals.

The process will now move forward along the slowest of five possible paths in the timetable after the delivery body, National Grid, confirmed that at least one non-qualifying project had submitted an appeal to the regulator within the allowed five-day window.

Ofgem expects to complete any assessments by 2 August. The sealed bid window will then begin on 14 August, followed by allocation and auditing on 19 August. Applicants will be notified of the outcome on 11 September.

Up to £270 million of annual subsidies will be allocated in the auction, which is open to immature “Pot 2” technologies such as offshore wind, wave and anaerobic digestion.

Meanwhile, National Grid has also announced the timeline for the next set of capacity market auctions. The year-ahead (T-1) early auction for delivery in 2018/19 will begin on 18 January 2018, several weeks earlier in the year than the previous inaugural round.  

However, the main four-year-ahead (T-4) auction for delivery in 2021/22 will take place almost two months later than usual on 6 February 2018.

“Listening to feedback from capacity providers, we understand that they would prefer more time for prequalification readiness and submission”, National Grid stated in the timetable document.

“Through working with BEIS [the Department for Business, Energy and Industrial Strategy], Ofgem and the Electricity Settlements Company we have transformed the pre-auction process to deliver a plan that gives time for more prequalification readiness," continued National Grid.

“This will give capacity providers the time to develop their prequalification strategies and engage with the delivery body.”

A spokesman for National Grid denied that change was in any way linked to delays to key energy policy decisions such as the future of carbon price support post-2021.

The ten-week pre-qualification window will start on 24 July and assessments will take place over six weeks, beginning on 2 October.

The previous T-4 auction for delivery in 2020/21 saw more than 52GW of capacity win contracts, including 500MW of new battery storage.   

Author: Tom Grimwood,
Channel: Markets & Trading , Policy & Regulation

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