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<p>National Grid Electricity System Operator collects transmission charges from network
users 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 bidder 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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