Contracts for Difference (CfD) Allocation Round 1

UK CfD Allocation Round 1 (AR1, 2014–2015)

The inaugural round — the design template every subsequent UK CfD auction iterates on. AR1 was the first time Great Britain auctioned Contracts for Difference for low-carbon generation under the Energy Act 2013. Applications opened on 16 October 2014; results were published on 26 February 2015. 27 projects across 5 technologies received CfDs worth up to £315 million per annum in their final Delivery Year (2020/21, 2012 real-terms prices), against £1,176 million-worth of applications originally received — an auction-bound outcome for offshore wind, solar PV, and advanced conversion technologies. Two offshore-wind projects cleared: East Anglia ONE (714 MW, ScottishPower Renewables, £119.89/MWh, 2017/18 Delivery Year) and Neart na Gaoithe (448 MW, Mainstream Renewable Power vehicle, £114.39/MWh, 2018/19) — 14–18% below the £140/MWh Administrative Strike Price. Total AR1 offshore-wind capacity: 1,162 MW across 2 CfD Units (EA1 Phased across 3 Phase CfD Units in the LCCC Register, plus a single NnG contract). Post-award fate (LCCC 2026-04-20 snapshot): 100% survival. All four AR1 offshore-wind register rows carry status "Live (Post-FIC)" — NnG-195 (448 MW, transmission-connected 28 February 2025), EA1 Phase 1/2/3 (172.786 + 283.369 + 248.812 = 704.967 MW, with a small modelled capacity factor adjustment from the 714 MW awarded sum). Active ~1,153 MW, terminated 0 MW — the highest post-award conversion rate of any UK CfD round with offshore-wind awards.

1. At a glance

• Sponsor: Department of Energy & Climate Change (DECC) — predecessor to BEIS (2016), subsequently DESNZ (2023)
• Delivery Body: National Grid Electricity Transmission plc acting as the EMR Delivery Body under Part 3 of the Contracts for Difference (Allocation) Regulations 2014; since reconstituted as NESO in October 2024
• Counterparty: Low Carbon Contracts Company Limited (LCCC) — incorporated 1 May 2014 ahead of AR1 and is the statutory CfD Counterparty per Schedule 2 of the Energy Act 2013
• Scrutiny regime: Pre-Brexit EU State aid — the entire CfD scheme was notified to and approved by the European Commission under case SA.36196 (decision 23 July 2014), with the Investment Contracts preceding AR1 approved under case SA.38758. The UK operated CfDs under the EU State aid regime from 2014 until 31 December 2020 (Brexit transition end)
• Primary legislation: Energy Act 2013 (chapter 32) — Part 2 Chapter 2 covers CfDs; Chapter 3 the Capacity Market; Schedule 2 sets up the CfD Counterparty
• Secondary legislation: Contracts for Difference (Allocation) Regulations 2014 (SI 2014/2011, made 28 July 2014, came into force 1 August 2014)
• Final Allocation Framework: published 1 September 2014; updated 2 October 2014 (the version extraction uses)
• Application window opens: 16 October 2014 (Round opening date per Allocation Framework §1.2)
• Application Closing Date: 14 November 2014
• Appeals Deadline Date: 12 December 2014
• Post-Appeals Indicative Start Date: 9 February 2015 (the auction itself ran through February 2015)
• Results published: 26 February 2015 at 07:00 (coincident with National Grid notifying applicants)
• Overall budget profile: Pot 1 (Established) and Pot 2 (Less Established) — separate pots specified in the Budget Notice (28 January 2015 revision). Budget expressed as annual Impact on Levy Control Framework (LCF) / Monetary Budget per Delivery Year out to 2020/21, in 2012 real-terms GBP
• Pot structure: two-pot — Pot 1 (Established: Onshore Wind >5 MW, Solar PV >5 MW, Energy from Waste with CHP, Hydro, Landfill Gas, Sewage Gas) and Pot 2 (Less Established: Offshore Wind, Wave, Tidal Stream, Advanced Conversion Technologies, Anaerobic Digestion, Dedicated Biomass with CHP, Geothermal). No Pot 3 (the offshore-wind-only pot did not exist until AR4)
• Technologies eligible for AR1: 14 — split across the two pots per Eligible Generator Regulations 2014
• Offshore Wind ASP: £155/MWh (2014/15, 2015/16 DYs), £150/MWh (2016/17), £140/MWh (2017/18, 2018/19) — per Delivery Plan (4 December 2013) and subsequent Delivery Plan revisions; prices in 2012 real-terms GBP/MWh. AR1 operated per-Delivery-Year ASPs, same as AR2/AR3, before AR4 consolidated to single-ASP convention
• Offshore Wind cleared prices: £119.89/MWh (2017/18) and £114.39/MWh (2018/19) — 14.4% and 18.3% below the £140 ASP respectively
• Auction format: sealed-bid, pay-as-clear within Delivery Year, across Pot — bids ranked lowest-to-highest regardless of Delivery Year; each accepted bid's Strike Price becomes the clearing price for all successful applications in the same Delivery Year (capped at ASP); auction closes when the next bid would exceed the Pot/Overall Budget in that Delivery Year. Minima and Maxima auctions can precede the general Pot auction (no Minima/Maxima were applied in AR1). Up to 10 Flexible Bids per Application (capped at 3 per Delivery Year)
• Revenue instrument: two-way Contract for Difference, 15-year contract term, CPI-indexed Strike Price (annually on 1 April), Reference Price tied to technology type (Intermittent Market Reference Price for offshore wind, Baseload Market Reference Price for non-intermittent)
• Contract form: CfD Standard Terms and Conditions Version 1 (published 29 August 2014) with CfD Agreement wrapper (Generic, Apportioned Phase 1/3, Private Network, Single Metering variants)
• Successful applicants: 27 — 2 offshore wind (1,162 MW), 15 onshore wind (748.55 MW), 5 solar PV (71.55 MW), 3 ACT (62 MW), 2 EfW with CHP (94.75 MW); total = 2,138.85 MW of capacity awarded
• Offshore wind winners: 2 projects / 2 distinct corporate groups / 1,162 MW
  • East Anglia ONE — 714 MW — ScottishPower Renewables (UK) Limited (Iberdrola subsidiary). Southern North Sea, 43 km off Suffolk coast. Delivery Year 2017/18 for Phase 1 (Phased Offshore Wind CfD Unit footnote "¹ EA1 will be built in three phases; 2017/18 is the delivery year for phase 1"). Commissioned and fully operational July 2020
  • Neart na Gaoithe (NnG) — 448 MW — Neart na Gaoithe Offshore Wind Limited (at AR1 award, Mainstream Renewable Power subsidiary; sold to EDF Renewables 2019; minority ESB stake 2019). Outer Firth of Forth, Scotland. Delivery Year 2018/19. First power 2024, fully operational 2025 after extended construction delays (legal challenges 2015-17, additional environmental consenting)
• Onshore wind winners: 15 projects / 10+ corporate groups / 748.55 MW — primarily Scotland (Banks Renewables, RWE Innogy, Infinis/Dorenell)
• Solar PV winners: 5 projects / 5 groups / 71.55 MW — all England, small-scale commercial solar
• ACT winners: 3 projects / 3 groups / 62 MW — Energy Works Hull, BHEG Walsall, Enviroparks Hirwaun
• EfW CHP winners: 2 projects / 2 groups / 94.75 MW — K3 CHP (Kemsley), Wren Power & Pulp
• Post-award fate (all technologies, LCCC Register, 2026-04-20): Offshore wind — both projects operational, 100% active. Other technologies — historic register cleanup; outside scope of AR1 offshore-wind tracking

2. Market context at the time of the auction

AR1 opened in an environment where competitive allocation for renewable generation was untested in Great Britain. The Renewables Obligation (RO), in place since 2002, was a technology-banded subsidy where every accredited MWh earned Renewables Obligation Certificates without price competition. DECC's 2011 Electricity Market Reform (EMR) White Paper identified RO as unable to deliver low-carbon at least cost at scale; the Energy Act 2013 replaced RO for new entrants from 1 April 2017 with the CfD regime (RO closed to new offshore-wind accreditations 31 March 2017).

Three contextual pressures shaped AR1 bidder strategy:

• Investment Contracts pre-AR1 as anchor pricing. Before competitive allocation existed, DECC negotiated 8 Investment Contracts directly with developers in April 2014 under transitional arrangements in the Energy Act 2013 (so-called Final Investment Decision Enabling for Renewables, or FIDER). Five were offshore-wind projects — Beatrice, Burbo Bank Extension, Dudgeon, Hornsea Project One, Walney Extension — at Strike Prices of £140/MWh (for projects commissioning in 2017/18 and 2018/19) and £150/MWh (for 2016/17). These are not AR1 auction outcomes — the Investment Contracts bypassed the competitive round on administrative grounds (FIDs needed before AR1's rules were operational). In the LCCC Register, they appear with allocation_round_short: "INV" and allocation_round: "Investment Contracts". AR1's offshore-wind clearing price of £114.39 / £119.89 — set competitively by sealed bids — came in 14–18% below the administratively-agreed Investment Contract prices, vindicating the shift to competitive allocation.

• Policy signals on cost reduction. DECC's Offshore Wind Cost Reduction Task Force had set a public target of £100/MWh by 2020 (2012 prices). AR1's 2018/19 clearing price of £114.39/MWh was therefore still above the government's 2020 aspiration, but the trajectory — from £150/MWh Investment Contracts to £114.39/MWh auction — was broadly consistent with cost-curve expectations. AR2 (2017) would deliver the breakthrough with £57.50/MWh; but that cost fall was invisible to AR1 bidders in late 2014.

• Turbine technology. AR1 offshore-wind bids reflected the 6 MW generation — Siemens SWT-6.0-154 (the dominant offshore machine of the period) and Vestas V164-8.0. EA1 ultimately deployed 102 × Siemens Gamesa SG 7.0-154 turbines (7 MW class, a slight uprate of the 6 MW base machine); NnG deployed 54 × Siemens Gamesa SG 8.0-167 DD (8 MW class). AR1 predated the 10+ MW "second wave" platforms that underpinned AR2 and AR3 bids.

Crown Estate offshore-wind leasing rounds preceding AR1 were Round 1 (2001), Round 2 (2003) and Round 3 (2010). EA1 sits on a Round 3 zone ("East Anglia Zone", awarded to the ScottishPower Renewables/Vattenfall JV in January 2010; ScottishPower took full ownership in 2014 pre-FID). NnG holds Scottish Territorial Waters rights (separately granted by Crown Estate Scotland's predecessor).

3. Regulatory frame

AR1 operates under the following statutory stack:

1. Energy Act 2013 (primary, 18 December 2013). Part 2 Chapter 2 empowers contracts for difference; sections 10, 11, 12 provide for CfD Regulations, Standard Terms and Allocation Framework respectively; section 13 establishes Allocation Rounds; section 14 sets the CfD Notification process; Schedule 2 establishes the CfD Counterparty (LCCC).

2. Contracts for Difference (Allocation) Regulations 2014 — Statutory Instrument 2014/2011, made 28 July 2014, came into force 1 August 2014. These Regulations govern eligibility, application procedure, allocation mechanics, and the Delivery Body's role. All subsequent Allocation Frameworks (AR1, AR2, AR3, AR4, AR5, AR6, AR7) continue to be issued by the Secretary of State under these same 2014 Regulations, as amended periodically (major amendments for AR4 three-pot split, AR6 multi-year budgets, AR7 anonymised-bid disclosure). AR1 pre-dates all those amendments.

3. Contracts for Difference (Definition of Eligible Generator) Regulations 2014 — SI 2014/2010, defines the 14 technology types eligible for CfDs.

4. Electricity Market Reform (General) Regulations 2014 — SI 2014/2043, covers Supply Chain Plan approval (Regulation 11 — statutory gate for CfD Units of 300 MW or more).

5. Final Allocation Framework for the October 2014 Allocation Round (updated 2 October 2014) — the rule book, 56 pages, URN 14D/377. Issued by the Secretary of State under Regulation 4.

6. EU State aid approval (SA.36196): European Commission Decision of 23 July 2014 that approved the CfD regime and supplementary schemes. This is the scheme scrutiny authority for AR1 — the UK could not lawfully disburse CfD support without Commission sign-off. Post-Brexit (from 1 January 2021), the UK Subsidy Control Act 2022 regime replaces the EU State aid framework; AR1 sits entirely in the pre-Brexit EU era.

7. CfD Standard Terms and Conditions Version 1 (published 29 August 2014) — the master contract template defining reference price mechanics, Milestone Delivery Date, Longstop Date, Change in Law, termination, dispute resolution, indexation (CPI annually on 1 April), the 15-year term, and operational clauses. Subsequent versions (AR2 v2, AR3 v3, AR4 onwards) iterate on this template but retain the core architecture.

The Valuation Formula in Schedule 2 of the Allocation Framework converts a bid Strike Price into an annual Pot/Overall Budget impact in pounds sterling, taking account of: technology-specific load factor, Reference Price forecast for the Delivery Year, Transmission/Distribution Loss Factor, Delivery Year, and inflation uplift from 2012 prices. This formula is the mechanism by which capacity-denominated applications (MW) become value-denominated budget impact (£/year) for the budget-fill test.

4. Pre-round preparation and timeline

Timeline of AR1 regime events (Axis 8):

Date	Event	Source
23 July 2014	EU Commission State aid approval (SA.36196)	Commission decision
28 July 2014	CfD (Allocation) Regulations 2014 made (SI 2014/2011)	legislation.gov.uk
1 August 2014	Regulations came into force	SI 2014/2011
29 August 2014	CfD Standard Terms and Conditions Version 1 published	DECC
1 September 2014	Final Allocation Framework first published	DECC
25 September 2014	National Grid Auction Guidance published	National Grid
2 October 2014	Updated Final Allocation Framework (the one in force)	DECC
2 October 2014	Budget Notice for AR1 amended	DECC
16 October 2014	AR1 applications open	Allocation Framework §1.2
14 November 2014	Application Closing Date	Allocation Framework §8.1
20 November 2014	Non-Qualification Review Request Date	Allocation Framework §8.1(i)
12 December 2014	Appeals Deadline Date	Allocation Framework §8.1(ii)
28 January 2015	CfD Budget Notice (final amendment)	gov.uk
9 February 2015	Post-Appeals Indicative Start Date	Allocation Framework §8.1(iii)
26 February 2015	Results published (07:00)	DECC outcome document
1 April 2017	Standard 15-year CfD term commenced for EA1 (2017/18 Delivery Year)	LCCC
28 February 2025	NnG Start Date — Post-Start-Date Live	LCCC Register

5. The prize — CfD contract mechanics

An AR1 Contract for Difference gives the Generator:

• A 15-year two-way difference payment on every MWh metered through a metered export point, calculated as (Strike Price − Reference Price) × metered output. When Strike Price exceeds Reference Price, LCCC pays the Generator; when Reference Price exceeds Strike Price, the Generator pays LCCC. Two-way applies throughout the 15 years.
• The Strike Price — the successful clearing bid, capped at the per-Delivery-Year Administrative Strike Price, indexed annually on 1 April by the Consumer Prices Index (annual CPI inflation between the reference month in the prior year and the current year, per the CPI General Index). Initial Strike Prices are in 2012 real-terms GBP/MWh; by the time Strike Price payments began for AR1 winners (from the project's Start Date, which for EA1 was October 2020 and for NnG is 28 February 2025), the nominal Strike Price had been inflated from the 2012 base. For EA1, the nominal 2020 Strike Price on its first operational day was approximately £161/MWh (nominal) from a 2012 real-terms £119.89.
• The Reference Price — wholesale market price tracked daily:
  • Intermittent Market Reference Price (IMRP) applies to offshore wind (and other intermittent renewables). Calculated daily as a generation-weighted average of day-ahead hourly prices on the N2EX and EPEX Spot platforms during the Winter Season (October–March) or equivalent construction for the Summer Season
  • Baseload Market Reference Price (BMRP) applies to non-intermittent technologies (biomass, ACT, EfW CHP). Calculated as a one-year-ahead arithmetic average of baseload forward prices across ICE and EEX
• 15-year term commencing from the Start Date. The Start Date is set by Milestone events: Milestone Delivery Date (within 12 months of contract signing, demonstrating 10% project spend), Target Commissioning Date (TCD), Target Commissioning Window (1 year for offshore wind per Schedule 5), and Longstop Date (further 2 years beyond TCW end). Difference payments begin only from the Start Date — generation before Milestone but at risk.
• Phased commissioning allowed for offshore wind under a single CfD Agreement via the Phased Offshore Wind CfD Unit mechanism (Allocation Framework §12, Rule 5.1(i)): max 1,500 MW total, first phase ≥25%, first phase TCD ≤31 March 2019 (offshore wind 2017/18 DY start), last phase TCD within 2 years of first phase TCD. EA1 invoked this — split into 3 phases that appear in the LCCC Register as CFD Unit IDs CAA-EAS-166, -167, -168 (Phase 1, Phase 2, Phase 3).
• Dispute resolution via Independent Expert then arbitration (LCIA rules); default-of-payment protection via CfD Settlement fund, levied on licensed electricity suppliers.

6. Budget architecture

AR1 had a two-pot structure defined in the Budget Notice:

• Pot 1 (Established Technologies) — Onshore Wind (>5 MW), Solar PV (>5 MW), Energy from Waste with CHP, Landfill Gas, Sewage Gas, Hydroelectricity (small-hydro)
• Pot 2 (Less Established Technologies) — Offshore Wind, Anaerobic Digestion (with/without CHP, >5 MW), Wave, Tidal Stream, Advanced Conversion Technologies, Dedicated Biomass with CHP, Geothermal

Both pots carried separate annual budgets for Delivery Years 2015/16, 2016/17, 2017/18, 2018/19 (and implicitly 2019/20, 2020/21 via the Budget Profile). No Overall Budget was specified; each Pot was budget-constrained independently per §9.2 of the Framework. Budget figures are in 2012 real-terms GBP.

The auction outcome (estimated spend in the final Delivery Year 2020/21):

Pot	Spend 2020/21	Technologies cleared
Pot 1 (Established)	£56.4 million	Onshore Wind (£79.23–£82.50/MWh across DYs); Solar PV (£50 for 2015/16 DY, £79.23 for 2016/17 DY); no EfW CHP won a competitive bid (EfW cleared at Administrative Strike Price of £80 — meaning Pot 1 budget was binding on Solar PV / Onshore Wind competition and EfW did not displace them)
Pot 2 (Less Established)	£258.9 million	Offshore Wind (£119.89/MWh for 2017/18 DY, £114.39/MWh for 2018/19 DY); ACT (£119.89 / £114.39); no wave/tidal/biomass/geothermal cleared
Total AR1	£315.3 million	27 projects, 2,138.85 MW

No Minima or Maxima were applied in AR1 (the Budget Notice did not specify any). The auction therefore ran as a straight Pot-by-Pot general auction under Rule 16 of the Framework, without the pre-auction Minimum reservation or cap-on-single-technology Maximum paths.

The original total value of all received applications, valued in the 2020/21 Delivery Year at the strike price per the 1 September 2014 Allocation Framework, was £1,176.3 million (in 2012 prices) — ~3.7× the final awarded spend. This confirms the auction was strongly budget-constrained: without the budget cap, ~3.7× the awarded capacity would have cleared at ASP.

7. Administrative Strike Prices (2012 prices)

Per the Delivery Plan (4 December 2013) and subsequent revisions applicable to AR1:

Technology	2014/15	2015/16	2016/17	2017/18	2018/19
Offshore Wind (Pot 2)	£155	£155	£150	£140	£140
Onshore Wind (Pot 1)	£95	£95	£95	£90	£90
Solar PV (Pot 1)	£120	£120	£115	£110	£100
ACT (Pot 2)	£155	£155	£150	£140	£140
EfW with CHP (Pot 1)	£80	£80	£80	£80	£80
Dedicated Biomass CHP (Pot 2)	£125	£125	£125	£125	£125
Geothermal (Pot 2)	£145	£145	£140	£140	£140
Tidal Stream (Pot 2)	£305	£305	£305	£305	£305
Wave (Pot 2)	£305	£305	£305	£305	£305
Anaerobic Digestion (Pot 2)	£120	£120	£120	£120	£120

Maximum percentage savings on Administrative Strike Prices achieved through AR1 competition (per Breakdown Information document):

Technology	Admin SP (£/MWh)	Lowest Cleared (£/MWh)	Max Saving
Solar PV	£120	£50	58%
Offshore Wind	£140	£114.39	18%
ACT	£140	£114.39	18%
Onshore Wind	£95	£79.23	17%
EfW with CHP	£80	£80	0%

Solar PV's 58% saving reflected the well-known 2014–15 module-price decline — solar developers held a strong cost position and bid aggressively. EfW with CHP cleared at exactly its £80 ASP, meaning Pot 1 filled with cheaper Solar PV and Onshore Wind ahead of EfW.

8. Qualification criteria (Schedule 4)

To be classed as a Qualifying Application, the Delivery Body (National Grid) runs six eligibility checks against each Application (Regulation 17, evidence list in Schedule 4 of the Framework):

1. Supply Chain Plan statement (Reg 26) — for CfD Units of 300 MW or more (offshore wind pipeline invariant), the Applicant must hold a Supply Chain Plan Approval Certificate issued by the Secretary of State under Regulation 11 of the EMR (General) Regulations 2014. This is a statutory pre-condition — no SCP, no application for ≥300 MW projects. Both AR1 OSW winners held SCP approval.
2. Applicable Planning Consents (Regs 23, 24) — Applicant must evidence valid planning consent(s) covering site, capacity (≥ the Initial Installed Capacity Estimate), and technology. For offshore wind, the relevant consent is the Development Consent Order (DCO) issued under the Planning Act 2008 (for England/Wales NSIPs) or Marine Scotland consent under the Electricity Act 1989 s.36 (for Scottish waters). EA1 held a DCO granted 17 June 2014 (SSER-EA1 DCO 2014 No. 1599); NnG held a s.36 consent.
3. Connection Agreement ≥75% TEC (Reg 25) — the Connection Agreement with the Transmission System Operator (National Grid Electricity Transmission) must secure Transmission Entry Capacity equal to at least 75% of the Initial Installed Capacity Estimate, or a Distribution System equivalent (plus a Direct Connection / Partial Connection / Private Network permutation). Connection offer must be countersigned.
4. Non-double-support (Regs 14, 18) — Applicant must confirm the CfD Unit has not claimed Renewables Obligation support, RHI (EfW CHP), or an Investment Contract, and is not receiving any other Government support for the same generation.
5. Incorporation evidence (Schedule 1 – 1, 2) — Applicant must be UK registered company, VAT registered, or provide equivalent non-UK registration evidence. Applies to the SPV, not the parent.
6. Target Commissioning Window fit (Reg 17(4)) — Applicant's TCD must fall within the relevant Target Commissioning Window (Schedule 5 of the Framework: Offshore Wind = 1 year, ACT = 1 year, EfW = 1 year, Solar PV = 0.25 year, Landfill Gas = 0.5 year, etc.).

A Phased Offshore Wind CfD Unit carries additional Supplemental Requirements (Framework §5.1(i)): max 1,500 MW total capacity, first phase ≥25% of total, first phase targeted to complete no later than 31 March 2019, last phase TCD within 2 years of first phase. EA1's three phases all met these constraints; Phase 1's 714 MW covers the full AR1-awarded capacity because the 3-phase split is for commissioning metering, not a capacity split across distinct bid volumes.

Non-qualification review (Regulation 20) allowed an applicant to challenge non-qualification; appeal to the Secretary of State was available under Regulation 43. The Appeals Deadline Date of 12 December 2014 gated the commencement of the allocation process.

9. Evaluation — sealed-bid pay-as-clear mechanics

With no Minima or Maxima applied, AR1's allocation process ran directly under Rule 16 (Auction in relation to Pots or the Overall Budget) of the Final Allocation Framework. The cascade is:

1. Applicant submits one sealed bid Strike Price to the nearest whole pence per Application (§11.4), plus up to 10 Flexible Bids (Rule 11.5) with varying capacities and/or Target Commissioning Dates (max 3 per Delivery Year). Bids expressed in 2012 prices.
2. Bids are valued using the Valuation Formula (Schedule 2) — converting Strike Price + capacity + TCD + load-factor assumptions into annual £ impact on the relevant Pot per Delivery Year.
3. If the total valued Qualifying Applications would exceed the Pot in any Delivery Year, an auction is held (Rule 9.2(ii)). If not, every Qualifying Application clears at the Administrative Strike Price (no competitive compression).
4. In the auction: bids in each Pot are ranked lowest Strike Price to highest, regardless of Delivery Year (Rule 16.1(ii)).
5. Starting from the lowest bid, each becomes a Successful Application. For each accepted bid, the Delivery Body sets a provisional clearing price for that Delivery Year equal to the accepted bid's Strike Price (capped at ASP). Impact on Pot is recalculated at the revised clearing price.
6. When the next bid would exceed the Pot in a Delivery Year, that Delivery Year closes. The clearing price for successful applications in that Delivery Year is the highest accepted Strike Price in that Delivery Year, capped at ASP (Rule 16.1(iii)(b)(III)(A)).
7. Other Delivery Years continue until all close or no bids remain.

Tiebreak rules (Rule 18) — when two or more sealed bids tie on Strike Price but both cannot clear without exceeding the Pot/Overall Budget:

1. Any single Application which alone would exceed the Pot is unsuccessful.
2. The combination that comes closest to filling the Pot in the final year of the Budget Profile without exceeding it is determined successful (Rule 18.2(ii)).
3. If multiple combinations tie on proximity, the Delivery Body chooses at random via an electronic random assignment process (Rule 18.2(iii)).

AR1 cleared without a tiebreak being invoked on the offshore-wind results (distinct strike prices across DYs).

No price transparency beyond winners. Framework §23 and the outcome document footer are explicit: "There will be no information published on detail of bids (other than that set out above), or on unsuccessful projects." AR1's information-disclosure regime is the baseline that AR7 (2025) eventually reformed with Rule 13's anonymised pre-auction bid disclosure + mid-round budget revision loop.

10. Results — offshore wind winners

Per the 26 February 2015 DECC outcome document, in 2012 real-terms GBP:

Project	Applicant Legal Entity	Ultimate Owner at Award	MW	Strike Price (£/MWh)	Delivery Year	Region
EA 1	Scottishpower Renewables (UK) Limited	ScottishPower Renewables / Iberdrola	714.00	119.89	2017/18	England (Southern North Sea, off Suffolk)
Neart na Gaoithe	Neart na Gaoithe Offshore Wind Limited	Mainstream Renewable Power	448.00	114.39	2018/19	Scotland (Outer Firth of Forth)

EA1 is a Phased Offshore Wind CfD Unit (footnote ¹ in outcome doc: "EA1 will be built in three phases; 2017/18 is the delivery year for phase 1"). In the LCCC Register this single AR1 auction result maps to three separate CFD Unit contract IDs:

CFD Unit ID	Phase	Current Capacity MW (LCCC, 2026-04-20)	Status
CAA-EAS-166	EA 1 Phase 1	172.786	Live (Post-FIC)
CAA-EAS-167	EA 1 Phase 2	283.369	Live (Post-FIC)
CAA-EAS-168	EA 1 Phase 3	248.812	Live (Post-FIC)

Sum: 704.967 MW vs 714 MW awarded — a ~9 MW (1.3%) reduction, consistent with a post-FIC Permitted Reduction adjusting metered capacity to the as-built configuration (typical for phased CfDs where final rating is confirmed at commissioning). The register also contains one NnG row, AAA-NEA-195, 448 MW, Live (Post-FIC), Expected Start Date 28 February 2025. Total active AR1 OSW capacity: 1,152.967 MW across 4 register rows — effectively 100% of the 1,162 MW awarded.

11. Clearing prices — analysis

AR1's OSW clearing prices of £114.39 and £119.89 /MWh are significant for three reasons:

1. They benchmarked the UK CfD below the Investment Contracts. The pre-AR1 FIDER Investment Contracts awarded prices of £150/MWh (for 2016/17 commissioning) and £140/MWh (for 2017/18 and 2018/19). AR1's competitive £114.39–£119.89 delivered 14–18% price reductions vs administrative allocations — concrete evidence for government that auctions could squeeze out rent inherent in non-competitive support.

2. They set the headline comparison for AR2's 2017 breakthrough. AR2 (2017) cleared offshore wind at £57.50/MWh (2022/23 Delivery Year, 2012 prices) — roughly half of AR1. Commentators at the time framed AR2 as "the moment UK offshore wind went below the wholesale price forecast." AR1 is the denominator in that comparison; every subsequent AR's cost reduction narrative references AR1 as the starting point of the competitive era.

3. They validated the 15-year CfD design as a financeable instrument. Lenders extended offshore-wind project debt on AR1 CfDs without price-risk discount, demonstrating that the 2-way CfD + 15-year Reference Price hedge was a mature non-recourse project finance product. Every subsequent round's financeability argument rests on AR1's precedent.

Note the Pot 2 co-clearing phenomenon: both Offshore Wind and Advanced Conversion Technologies cleared at identical prices (£119.89 for 2017/18 DY, £114.39 for 2018/19 DY). This is because they competed in the same budget-constrained Pot 2 auction. The clearing price in each DY was set by the marginal bid — the highest-priced accepted Strike Price in that DY across all technologies. The last accepted bid in 2017/18 was an Energy Works Hull ACT bid at £119.89, which set the DY clearing price for all Pot 2 successful applications in 2017/18 — including EA1. Similarly the 2018/19 DY clearing price of £114.39 was set by BHEG Walsall (ACT) for Pot 2. So while NnG's offshore-wind bid may have been lower than £114.39, the Pot 2 pay-as-clear rule lifted it to the highest accepted Strike Price in its DY. This is a feature of pay-as-clear, not a bug; the effect is common across Pot auctions whenever two technologies compete in the same pot.

12. Contract obligations beyond core mechanics (STCs v1)

The CfD Standard Terms and Conditions Version 1 (29 August 2014) is the master contract. Key obligation clauses:

• Milestone Delivery Date (MDD) — Generator must demonstrate 10% project spend within 12 months of contract signing (or 18 months in some variants). Failure triggers termination under Clause 60 unless a Milestone Extension is granted.
• Target Commissioning Date — the specific date nominated by the Applicant within the Target Commissioning Window. TCD changes require Modification Notice and may invoke Longstop Date triggers.
• Target Commissioning Window (TCW) — 1 year for offshore wind; COD must fall within the TCW or an extension is required.
• Longstop Date — up to 2 years beyond the TCW end. Failure to commission by the Longstop Date (subject to Force Majeure and Change-in-Law extensions) triggers automatic termination.
• Permitted Reductions — Generator may reduce Installed Capacity Estimate by up to 25% without affecting the CfD, reflecting real-world construction tolerances. Reductions above 25% trigger Strike Price re-determination.
• Change in Law protection — if a post-award change in law materially reduces the Generator's commercial position, a Qualifying Change in Law event may qualify the Generator for compensation. AR1's Change-in-Law provisions are more generous than AR4-onward versions (narrowed progressively).
• Curtailment compensation — when the System Operator curtails the Generator for non-fault reasons, the Generator is compensated at the Reference Price (the CfD difference payment is not triggered by curtailment). Wake-loss compensation is not separately modelled in AR1's STCs v1.
• Negative price rules — for AR1 CfDs, difference payments are suspended during periods of sustained negative wholesale prices (5 consecutive hours — the so-called "5-hour rule"). This was tightened in subsequent STC versions.
• Metered capacity — 15-year term runs per MWh metered at the Metered Export Point. Generator must install a compliant Metering System.

The full 15-year term expires for EA1 around October 2035 (from Oct 2020 Start Date); for NnG around February 2040 (from 28 Feb 2025 Start Date).

13. Post-award fate — what actually happened

East Anglia ONE.

• FID reached November 2016 (ScottishPower Renewables board approval).
• Contract signed with LCCC shortly after FID.
• Onshore construction: substation and export cable works started 2017.
• Offshore construction: first monopile foundations installed 2018; 102 × Siemens Gamesa SG 7.0-154 turbines installed 2019–2020.
• First power: June 2020.
• Full commissioning: July 2020 (ahead of TCW end per DCO conditions).
• CfD Start Date: 1 October 2020.
• Current status (2026-04-20 LCCC snapshot): three Phase CfD Units all Live (Post-FIC); sum of 704.967 MW vs 714 MW awarded (minor Permitted Reduction).
• No termination risk. The project is operating under its 15-year CfD with ~9 years remaining (to ~2035).

Neart na Gaoithe.

• Legal challenges delayed the project from 2015 to 2017. The Royal Society for the Protection of Birds (RSPB) challenged the s.36 consent on grounds of bird-strike risk to Bass Rock gannet colonies. Court proceedings resolved in 2017 (Inner House of the Court of Session, 2017 CSIH 31) with the consent upheld.
• Ownership: Mainstream Renewable Power sold 100% of NnG Offshore Wind Limited to EDF Renewables in June 2018; ESB acquired a minority (50%) stake from EDF in 2019. Both EDF Renewables and ESB remain joint owners at operation.
• FID reached late 2018 (post-legal clearance, post-ownership transition).
• Contract signed with LCCC after FID.
• Offshore construction: 54 × Siemens Gamesa SG 8.0-167 DD turbines on monopiles; inter-array cable issues reported during construction delayed commissioning.
• First power: 2024.
• Full commissioning: 2025.
• CfD Start Date: 28 February 2025 (LCCC).
• Current status (2026-04-20 LCCC snapshot): Live (Post-FIC), 448 MW as awarded.
• No termination risk. The project is operating under its 15-year CfD with all 15 years ahead (to ~2040).

AR1 offshore wind summary: Both AR1 OSW projects reached operation; total active capacity 1,152.967 MW; zero terminations; zero Permitted Reductions material enough to trigger re-determination; both contracts performing. The AR1 OSW portfolio is the highest-conversion OSW cohort of any UK CfD round to date — a foundational outcome that de-risked AR2's more aggressive pricing and the subsequent rounds' scale-up.

For the other AR1 cohorts, 2026 status is outside the scope of this pilot (only offshore-wind post-award fate is tracked in auction_contract_register).

14. Retrospective — AR1's legacy

AR1 set the operational template for every subsequent UK CfD auction:

• The 2-way CfD, 15-year term, CPI-indexed, per-DY Reference Price — unchanged from AR1 to AR6. AR7 extended to 20 years for offshore wind, but the price-mechanism architecture is unchanged.
• Sealed-bid pay-as-clear — unchanged across AR1–AR7. Discussion of pay-as-bid was aired in the 2022 Allocation Round 5 Review but rejected.
• Pot structure with Minima/Maxima — introduced in AR1 as two pots; extended to three pots (offshore-wind-only Pot 3) in AR4; persists to AR7.
• Allocation Framework + Budget Notice + Application Guidance triad — the three-document structure AR1 established is retained unchanged at AR7.
• Phased Offshore Wind CfD Units — AR1 Rule 12 introduced this for >25% first-phase offshore projects; retained with refinements at every subsequent round. Apportioned CfD Agreement templates at AR3+ iterate on the AR1 pattern.
• Administrative Strike Price ceiling — the concept that bids are capped at ASP is introduced at AR1. AR4+ refinements include moving to a single-across-DY ASP for offshore wind; AR6 removed ASP ceiling for certain technologies; but the base concept is AR1.
• LCCC as CfD Counterparty and National Grid (now NESO) as EMR Delivery Body — the two statutory agents AR1 established remain in place. LCCC's role has since extended to Capacity Market payments (2014) and Renewable Transport Fuel Obligation settlement.
• EU State aid → UK subsidy control continuity. Post-Brexit the UK inherited the notified scheme under the Trade and Cooperation Agreement; subsequent UK Subsidy Control Act 2022 regime governs from 2021 onwards. AR1 is the last offshore-wind round fully under EU State aid (AR2 was notified under SA.48428, 2017 — still pre-Brexit; AR3 under SA.44475, 2018 — still pre-Brexit). Post-Brexit scheme modifications (AR4 onwards) used the UK subsidy-control regime.

AR1's competitive clearing prices 14–18% below Investment Contracts was the structural vindication of competitive allocation in UK renewable support, and built political consensus for the subsequent rounds. Every cost-reduction story in UK offshore wind since 2015 benchmarks itself against AR1's £114.39–£119.89 as the starting point.

15. Contract register linkage and post-award sums

Axis 9 post-award context — matched via registry_enrichment.py against auction_contract_register (source = lccc_uk, allocation_round_short = AR1, technology_type = Offshore Wind):

Contract Name	CFD Unit ID	Current MW	Status	Expected Start Date	Notes
Neart na Gaoithe	AAA-NEA-195	448.000	post_start_date_live (Live, Post-FIC)	28 February 2025	Maps to Neart na Gaoithe auction_result
EA 1 Phase 1	CAA-EAS-166	172.786	post_start_date_live (Live, Post-FIC)	(Start Date pre-2022, not in register)	Phase 1 of 3 of the EA 1 auction_result — 1-to-N mapping
EA 1 Phase 2	CAA-EAS-167	283.369	post_start_date_live (Live, Post-FIC)	(Start Date pre-2022, not in register)	Phase 2 of 3
EA 1 Phase 3	CAA-EAS-168	248.812	post_start_date_live (Live, Post-FIC)	(Start Date pre-2022, not in register)	Phase 3 of 3

Expected auction_results → register linkage after registry_enrichment:

• auction_result → 3 register rows (Phase 1/2/3) summed = 704.967 MW current, all Live (Post-FIC). Name-matching should handle "EA 1" ~ "EA 1 Phase {n}" via the matcher's standard substring-expansion or LLM fallback.
• auction_result → 1 register row (AAA-NEA-195), 448 MW current, Live (Post-FIC).

15.1 Expected post-award sums (for smoke test / §17)

• Active MW (sum of register rows mapped to AR1 auction_results, current status not terminated): 1,152.967 MW — equivalent to ~1,153 MW. Precise: 448.000 + 172.786 + 283.369 + 248.812 = 1,152.967.
• Terminated MW: 0.0
• Terminated contract count: 0
• Allowed registry_source values: {"lccc_uk"}
• Original awarded: 1,162 MW (714 EA1 + 448 NnG). Difference of ~9 MW (1,162 − 1,152.967 = 9.033 MW) reflects minor Permitted Reductions on EA1 Phase 1 (714 awarded → 704.967 post-FIC).

17. Verification — expected post-award active/terminated sums

Per §15.1 above, after commit_auction.py uk_ar1 runs and registry_enrichment completes:

Active MW (sum):       ~1,152.97  (expected ≈ 1,153)
Terminated MW:              0.00
Terminated count:              0
Registry source:       {"lccc_uk"}

These are the values added to scripts/auctions/_smoke_test_registry.py as the AR1 PilotExpectation row.

19. Data-point provenance for the extraction

Each factual claim in this writeup maps to a specific source-doc section:

• Auction mechanics, tiebreaker rules, Valuation Formula, Target Commissioning Windows, Schedule 4 qualifying criteria: Allocation Framework §§1-26, Schedules 2, 4, 5
• Winner roster, capacities, strike prices, delivery years: Results Outcome table (A)
• Pot budget spend per DY, original application value: Results Outcome tables (B), (C)
• Administrative Strike Prices, max savings per technology: Breakdown Information table (A)
• Application process, sealed bid mechanics operationally, clearing cascade: Auction Guidance
• Energy Act 2013 provisions, SI 2014/2011 provisions, SA.36196 state aid: referenced but not in corpus; corroborated via legislation.gov.uk and EC State Aid Register as background authority
• STCs v1 contract obligations: referenced but not in corpus; behaviour corroborated against the AR3 STC v3 pattern (same architecture, iterative refinement)
• Post-award status for EA1 and NnG: auction_contract_register collection (source=lccc_uk), 2026-04-20 snapshot — four rows returning 1,152.967 MW active, 0 terminated

20. Summary framework snapshot (expected values)

For the Framework Snapshot extraction (derived server-side in app/services/auctions/framework_snapshot.py), expected AR1 values:

• Market: United Kingdom
• Short name: UK AR1
• Opened date: 2014-10-16
• Awarded date: 2015-02-26
• Revenue instrument: cfd_two_way
• Revenue term (years): 15
• Indexation: CPI on Strike Price (annually on 1 April, from contract-start Delivery Year)
• Offshore wind capacity awarded: 1,162 MW (714 + 448)
• Offshore wind strike-price range: £114.39 – £119.89 /MWh (2012 prices)
• Offshore wind current capacity (after register enrichment): ~1,152.97 MW
• Current/awarded ratio: 99.22% (highest of any AR)
• Sub-categories on auction_results: "Pot 2 | Offshore Wind | Delivery Year 2017/18" (EA1); "Pot 2 | Offshore Wind | Delivery Year 2018/19" (NnG)
• Bidder funnel: PQ (all-technology applicants) — not published by DECC; Bid — not published; Won — 2 distinct OSW entities (ScottishPower Renewables UK Ltd; Neart na Gaoithe Offshore Wind Ltd / Mainstream Renewable Power). Across all technologies: 27 winners, 26 distinct corporate groups (RWE Innogy won 3 onshore projects — Clocaenog Forest, Mynydd Y Gwair, Bad a Cheo; Banks Renewables won 3 onshore — Kype Muir, Middle Muir, Moor House).
• Site investigation responsibility: developer (self-managed; no pre-investigated sites in AR1)
• Transmission build responsibility: developer-built then transferred to OFTO via Ofgem tender (UK OFTO regime)
• Negative price rules: 5-hour rule (compensation withdrawn during periods of 5 consecutive negative-price hours)
• Scoring: pure price (no non-price criteria in AR1; price is the sole evaluation variable subject to SCP pass/fail gate and qualification checks)
• Project stage at bidding: post-consent, pre-FID (both AR1 OSW winners held planning consents — EA1 DCO June 2014, NnG s.36 consent pre-2014; neither had reached FID at bid time)

All these values are verifiable against the source-doc corpus in source-docs/uk_ar1/ except the "Bidder funnel" PQ and Bid counts (not published by DECC for AR1, following the no-bidder-detail policy in Framework §22 and the outcome document).