The Department of Business, Energy and Industrial Strategy (BEIS) has informed the delivery body (National Grid ESO) that the results for the third contract for difference (CfD) allocation round will be released on 20 September 2019
The delivery body has informed applicants that the notifications of results will be issued before 8 am on 20 September 2019 through the Electricity Market Reform portal.
Successful applicants will receive their notification letter and an annex letter with details of the final strike price, target commissioning date(s) and allocated capacity.
Applicants who were not allocated in this CfD round will get a notification letter informing them of this outcome.
BEIS will publish the outcome of the allocation round as a whole before 8 am on its website, after the delivery body has issued the notifications to applicants.
Industry sources have suggested that bid prices could well be below £50/MWh (US$62/MWh) or lower still, well below the reference prices published by BEIS.
Analysts have previously suggested that a subsidy-free deployment of offshore wind capacity could occur with contracts in the range of £47-£49/MWh (US$58-$61/MWh).
However, as has also been highlighted, such low bids would inevitably place a strain – and intense downward pressure on costs – on the supply chain, a concern that was also expressed when prices fell steeply in the Round 2 auction.
Analysts such as Aurora Energy Research have predicted that the Round 3 auction will secure approximately 3 GW of offshore wind capacity. Another leading consultant, Cornwall Insight, has predicted that up to 3.2 GW of offshore wind capacity could be awarded in the CfD auction.
Up to 6 GW can be awarded in Round 3, so it is possible more capacity might be awarded if prices fall sufficiently.