AR8 strike prices to be frozen

Administrative strike prices for the upcoming CfD auction will remain at the levels set in the previous round, the Government has announced.

It said the decision, announced as part of the publication of statutory notices ahead of the auction, reflects its “central focus on competitive price outcomes in AR8”.

However, the pot structure has changed from previous auction rounds with solar and onshore wind being given separate pots, along with ones for offshore wind and floating offshore wind. Less established technologies such as landfill gas and geothermal will also have their own pot.

The budget for AR8 will be decided after applications have been assessed after the bidding window opens on July 20.

Kisha Couchman, Deputy Director of Policy at Energy UK said AR8 represented an opportunity to build on the success of AR7, which attracted record-breaking levels of private investment.

“If AR8 repeats that £22 billion, both households and investors will feel the benefit of the clean energy projects that will follow,” she said.

“Despite an increase in construction costs for all infrastructure projects, a strong AR8 will help drive down energy bills for customers, as well as provide confidence for developers, investors and supply chains to invest, innovate and support thousands of good jobs across the UK.”

In a briefing note, the Energy and Climate Intelligence Unit pointed out that the administrative strike prices announced for AR8 are the maximum bid prices that generators can put into the auction, and that historically final strike prices successful at auction have been around 15-20% less.