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Second, there is a non competitive allocation process of the CfD where DECC can and already did award producers directly without competitive bid to be supported on a negotiated strike price. According to the National Audit Office DECC already committed more than 16 billion pounds by the publication of its report June 2014, approximately the 58% of the total subsidy budget via this non competitive way full NAO report, page 9. Offshore wind, biomass plants and also EDFs Hinkley Point C NPP were awarded in the non competitive process, in effect DECC negotiating directly. CMAs opinion is that DECC awarded early subsidies significanly over their costs via the non competitive allocation. By CMAs calculation the strike price for offshore wind projects via the non competitive allocation were in the region of 140 150 /MWh while a comparable competitive strike price of 115 120 /MWh emerged in the competitive bidding around the same time. Forecasted market prices were at the level of 53 /MWh according to CMAThis means that there is possibly a 30 60 percent extra subsidy paid for producers under the non competitive offshore wind allocation that raises the cost of the subsidy for customers and decreases the potential for competition and economic efficiency. While the CMA agrees that there is a reason to keep a non competitive allocation a possibility and bilateral negotiations between DECC and the parties may be the only way of securing investment in these projects the too big leeway for DECC in it gives rise to potential anticompetitive effects in the future as well. CMA proposed that DECC should carry out and disclose a clear and thorough assessment of the impact of any proposal to use its powers to allocate CfDs outside a competitive process at two stages: when negotiations start and about to be submitted to the EU Commission for approval. This might lead to improved decision making and also transparency on the decision making process. Overall, CMAs soft remedies will only work if DECC and its successor complies with the broader spirit of CMAs remedial action. Just as some respondents to CMAs consultation I tend to be sceptic about the change these soft recommendations will lead to.

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