National Grid ESO is the Delivery Body for Electricity Market Reform (EMR). Part of this role includes the qualification of applicants and the allocation of Contracts for Difference (CfDs) in accordance with the CfD legislative framework and a number of Department for Business, Energy and Industrial Strategy (BEIS) documents that are specific to each Allocation Round.
Once the qualification process is complete, the Delivery Body will proceed with CfD valuation and allocation.
During application valuation, the Delivery Body will compare the aggregate financial value of all qualifying applications for each delivery year with the applicable budgets for each pot and any other limits set out in the relevant Budget Notice, to determine if there is a requirement for a competitive allocation process (auction).
Valuation of each application is carried out using the valuation formula set out in the CfD Allocation Framework.
If the pot budget is not exceeded each qualifying application will be offered a CfD at the Administrative Strike Price for its technology (unconstrained allocation). If the budget is exceeded, then the Delivery Body will run an auction (constrained allocation) to ration the available budget amongst the most competitive qualifying applicants.
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