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Home/Aurora’s view of the Contract for Difference Auction Round 3

Aurora’s view of the Contract for Difference Auction Round 3

We are pleased to present Aurora’s initial analysis and thoughts on the results of the Contracts for Difference Auction Round 3.

A summary of the analysis is as follows:

  • Results of the Contracts for Difference Auction Round 3 (AR3) were published by the UK Government on Friday 20th September, with 5.5 GW of offshore wind and 0.3 GW of other technologies secured across the two delivery years
  • Delivery years 2023/24 and 2024/25 cleared at £39.65/MWh and £41.61/MWh respectively
  • Aurora analysis suggests that with capture prices at this level or below, the existing £557 million CfD budget is sufficient to deliver 30 GW of offshore wind in line with the sector deal
  • However, in this scenario, the current set of projects will no longer be ‘subsidy-free’ since price cannibalisation will reduce capture prices to around £38-40/MWh in 2030
  • The ongoing Judicial Review casts doubt into these results as the auction may need to be rerun to include Pot 1 technologies, potentially changing the outcome for a number of projects

If you would like to discuss the findings, or become a subscriber please get in touch.

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