Concerns over possible AR9 auction delay

The Government has indicated there could be a delay to the AR9 auction under the Contracts for Difference scheme.

Speaking to a House of Lords committee, Energy Minister Michael Shanks said the terms of the scheme will be reviewed before the auction.

He stressed the important role the scheme has played to date in giving investors certainty to build new projects, but he said following the record levels of clean power capacity secured through the two most recent auction rounds a review was planned.

"We think it is a useful model at the moment, but we have said AR7 and AR8 ran with broadly the same terms as previous auction rounds, we do now want to pause before AR9 and look at whether we need some more significant changes to the contracts for difference scheme to make sure they work for the consumers of the country," he said.

According to Angus Widdowson, Head of Generation at SmartestEnergy, the news of a pause before AR9 will come as a blow to generators.

“We know success at auction doesn’t guarantee delivery, especially as a large share of the physical infrastructure needed to connect that generation doesn’t exist yet, but pausing AR9 isn’t a solution,” he said.

Widdowson said continued investment in grid infrastructure and a longer-term visibility for the industry over what the future of the energy market looks like was vital.

The UK Sustainable Investment and Finance Association also warned that plans to consider reforms to future CfD auctions ahead of AR9 could put “billions of pounds of capital at risk”.