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<p>National Grid Electricity System Operator collects transmission charges to recover
the cost of installing and maintaining the transmission system in Great Britain and
the offshore electricity network infrastructure. These include a locational element
to reflect network use as part of the requirement for cost reflective network charges.</p><p>
</p><p>Individual Contracts for Difference bidders will determine their bid prices
based on their own assessment of expected costs and revenues. The price paid to each
successful bid is based on the clearing price of a competitive auction.</p><p> </p><p>However,
the Department does set the maximum strike price each technology can receive (the
Administrative Strike Price), which takes into account a broad range of factors. This
incorporates our latest view of transmission charges, estimated for pipeline projects
where possible using tariffs and network charging assumptions for each location (provided
by National Grid).</p>
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