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The third Contracts for Difference allocation round (AR3) will commence on 29 May 2019.
AR3 will only be open to less established technologies, which for the first time will now include onshore wind located on remote UK islands (in practice expected to be primarily Scottish islands).
BEIS announced in November 2018 that participants in AR3 would be competing for an annual budget of £60mn, with successful bidders expected to commission in delivery years 2023-24 and 2024-25. In January 2019, BEIS published its Draft Allocation Framework for AR3, which sets out the rules applicable to AR3 and the eligibility requirements applicants must satisfy. It is this framework that will now be in the forefront of applicants minds as they prepare their applications to compete for contracts. Competition in the upcoming allocation round is expected to be fierce.
LexisPSL Energy’s Practice Note: Contracts for Difference (CfD)—key features , sets out in detail the key changes (including decisions made pursuant to the governments consultation responses published in June and August 2018 and to be implemented via the CfD Amendment Regulations 2018 and confirmed proposed draft CfD Standard Terms and Conditions and CfD Agreement).
In preparation for the opening of the scheme, our partner, Cornwall Insight, independent experts and a pre-eminent provider of research, analysis, consulting and training to participants in the energy markets and their advisors, are running a “Investment strategies for AR3” workshop in respect of AR3. The workshop will not only cover an overview of AR3, but will look at the detail of qualification and application for AR3, provide a walk through of how the auction process will work and, perhaps most importantly for lawyers, will look at the contractual obligations of successful bidders in AR3. For more information on this workshop and to book your place, see CfD workshop: Investment strategies for AR3.
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