AR8 could save consumers over £11bn

The upcoming Allocation Round 8 CfD round could procure up to 19GW of renewable power and save consumers over £11bn according to new forecasts.

LCP Delta said the savings could be achieved through lower wholesale electricity prices, as additional renewable generation displaces more expensive thermal generation, although these benefits are partly offset by an increase in CfD costs.

It said this year's auction is being conducted against a “backdrop of changing priorities for the government”.

“With policymakers placing greater emphasis on consumer bill impacts and value for money, AR8 will be shaped by a more flexible approach to budgets and strike prices than in previous rounds,” it said.

“As a result, auction outcomes will depend not only on competitive bidding from developers, but also on how government balances affordability, energy security and clean energy ambitions.”