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DESNZ reports on CfD and Capacity Market progress in 2023

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DESNZ published its annual report to Parliament on Tuesday 19 December, setting out the progress made on the Contracts for Difference (CfD) and Capacity Markets scheme in 2023. Key updates for the CfD scheme, since the 2022 update, include: the conclusion of Allocation Round 5 (AR5); a consultation and call for evidence in March 2023 on proposals to strengthen the government’s approach to supply chains and a subsequent response; and the publication of core parameters for AR6. It also notes that work has commenced to prepare for AR7, including a recent consultation from the government on proposals to introduce new Sustainable Industry Rewards. For the Capacity Market, it notes that the government has run several consultations over the year, including: its January 2023 consultation on proposals to better align the Capacity Market scheme with net zero; its annual consultation on new generating technologies in the future Capacity Market from September to November 2023; and its October to December 2023 consultation on further proposals to amend the Capacity Market and a call for evidence to help inform the 10-year review of the scheme.