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<p>Capacity caps can drive competitive auctions and deliver value for money for consumers.
In the absence of a capacity cap or similar constraint, competitors in Contract for
Difference auctions would have no incentive to bid below the wholesale price of electricity.
A capacity cap was first deployed in the third Contract for Difference auction in
2019, which secured nearly twice the capacity of the previous auction with a 30% reduction
in clearing prices. We continue to keep all aspects of the Contracts for Difference
Scheme under review and will publish auction parameters in due course.</p>
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