GBContracts for Difference (CfD) Allocation Round 1
Also known as: Allocation Round 1, Allocation Round One, AR1, UK AR1, UK CfD AR1, CfD Allocation Round 1, CfD Allocation Round One, Contracts for Difference Allocation Round 1, Contracts for Difference Allocation Round One, Contracts for Difference (CfD) Allocation Round One, 2015 UK CfD Allocation Round, First CfD Allocation Round
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AR1 opened as Great Britain shifted from the Renewables Obligation to competitive CfDs under Electricity Market Reform and the Energy Act 2013. The round operated under pre-Brexit EU State Aid approval (SA.36196), with bidder expectations still anchored by the non-competitive 2014 Investment Contracts awarded to five offshore-wind projects at £140-£150/MWh. At auction open the GB offshore-wind fleet was about 4.5 GW operational, no Crown Estate Round 3 projects were yet operating, and AR1 served as the first market test of whether sealed-bid competition could deliver materially lower offshore-wind support prices.
2
Sealed · single-round
Contract for Difference (CfD) agreement
1.2 GW
Offshore Wind Target Commissioning Window = 1 year.
GBP 114–120/MWh (2012 real)
15 years
CPI
Difference Amount is zero during blocks of 5 consecutive hours with negative Intermittent Market Reference Price under STCs v1.
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Qualifying Curtailment compensation exists under the narrower STCs v1 curtailment definition.
Non-delivery leads to contract termination without payment rather than a separate monetary non-delivery penalty.
15-year two-way Contract for Difference revenue contract under CfD Standard Terms and Conditions Version 1, awarded via CfD Notification to successful applicants.
→ Failure triggers termination unless an extension applies.
→ Required for phased-offshore-wind eligibility and continued compliance with the phased structure.
→ Required for phased-offshore-wind eligibility and delivery compliance.
TCW: Offshore Wind Target Commissioning Window = 1 year.
Late delivery: Non-delivery leads to contract termination without payment rather than a separate monetary non-delivery penalty.
Stage trigger: If budget constraints require an auction, the Delivery Body invites relevant Qualifying Applicants to submit sealed bids.
Single-round sealed-bid, pay-as-clear allocation within each delivery year across the relevant pot. Bids are ranked from lowest to highest strike price, and successful applications in the same delivery year receive that delivery year's clearing price capped at the Administrative Strike Price.
Applicant must be an Eligible Generator under the Contracts for Difference (Definition of Eligible Generator) Regulations 2014; already-commissioned generating stations are excluded.
Applicant must provide company incorporation / registration evidence appropriate to its jurisdiction and status.
Applicant must evidence valid planning consent(s) covering the stated site, capacity, technology, and location for the relevant works.
Applicant must provide qualifying connection-agreement evidence; for direct transmission connection, Transmission Entry Capacity must be at least 75% of the Initial Installed Capacity Estimate, with equivalent rules for distribution and phased cases.
For CfD Units with Initial Installed Capacity Estimate of 300 MW or more, the applicant must hold a Supply Chain Plan Approval Certificate issued by the Secretary of State.
Applicant must confirm the project is not receiving excluded overlapping government support such as RO, RHI, Investment Contract, or Capacity Market support for the same generation.
Applicant's Target Commissioning Date must fall within the relevant Delivery Year / Target Commissioning Window for the technology.
Technology-specific structural eligibility rules apply, including phased-offshore-wind constraints (maximum 1,500 MW total, first phase at least 25% of total, first phase TCD by 31 March 2019, final phase within 2 years of first phase, maximum 3 phases), commissioning exclusion for already-commissioned stations, and minimum-capacity rules for specified technologies above 5 MW.
Method: quantitative formula
Unit: GBP/MWh (2012 prices)
- closest envelope fit without exceeding budget — Where tied bids would cause the relevant Pot or Overall Budget to be exceeded, select the application or combination of applications that comes closest to filling the budget in the final year of the Budget Profile without exceeding it.
- electronic random assignment — If competing applications or combinations remain tied after the closest-fit test, resolve the tie by electronic random assignment.
Legal basis: Primary policy and scheme owner under the Energy Act 2013 and Contracts for Difference (Allocation) Regulations 2014; issued the Allocation Framework and Budget Notice for AR1.
Legal basis: Acted as the EMR Delivery Body under Part 3 of the Contracts for Difference (Allocation) Regulations 2014.
Legal basis: Statutory CfD Counterparty under Schedule 2 to the Energy Act 2013 and the Allocation Framework definitions.
Legal basis: Responsible for non-qualification review / appeals functions under the Allocation Regulations and Allocation Framework section 8.
Legal basis: Approved the UK CfD scheme under State Aid case SA.36196 on 2014-07-23 under the pre-Brexit EU State Aid regime.
Legal basis: Appointed by the Secretary of State per Regulation 36 of the Contracts for Difference (Allocation) Regulations 2014 to audit the valuation and allocation calculations executed by the Delivery Body (National Grid Electricity Transmission). Appointed per-round; identity of the AR1 Independent Auditor not separately published.
Successful applications receive the lower of the relevant delivery-year clearing price and the technology-specific Administrative Strike Price; if no sealed bid is submitted, the Delivery Body assigns a bid at the ASP.
Applications are valued under Schedule 2 using the budget-impact formula based on Strike Price, Reference Price, Load Factor, Capacity, hours, loss adjustment, and other factors to test affordability against the relevant pot budget.
Budget valuation and ex post CfD settlement depend on Strike Price minus Reference Price; offshore wind uses the Intermittent Market Reference Price.
| Winner | Site/Lot | Category | Awarded MW | Current MW | Price | Total Value | Delivery | Term | Mechanism | Signed | Offer | Current Status |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Scottishpower Renewables (UK) Limited | EA 1 | Pot 2 | Offshore Wind | Delivery Year 2017/18 | 714 MW | 704.967 MW | GBP 119.89/MWh | — | 2017 | — | auction clearing | 27 Apr 2016 | offered and signed | Live |
| Neart na Gaoithe Offshore Wind Limited | Neart na Gaoithe | Pot 2 | Offshore Wind | Delivery Year 2018/19 | 448 MW | 448 MW | GBP 114.39/MWh | — | 2018 | — | auction clearing | — | offered and signed | Live |