<p>As detailed in ‘Annex B: Strike Price methodology’<Sup>1</Sup> of the ‘Consultation on thedraft Electricity Market Reform Delivery Plan’ there are a rangeof factors to consider in setting a strike price. Theseinclude:</p><p>technology specific factors such as capital and operating costs, financing costs and any build constraints;</p><p>market conditions such as wholesale prices and the discount which generators face when signing a power purchase agreement (PPA); and</p><p>policy considerations such as the specific contract design, choices about technology mix and meeting the ambition for renewable electricity.</p><p>The methodology for setting strike prices is designed to provide an equivalent level of support to that received under the renewables obligation for the period when developers can choose between the renewable obligation and contracts for difference. After this period, strike prices are set to reflect both expectations of falling technology costs over time and the financial constraints imposed by the levy control framework.</p><p>The data used for technology specific factors the draft Delivery Plan Consultation including capital and operating costs and financing costs is detailed in Annex 3 of DECC's electricity generation costs 2013<Sup>2</Sup> report. Page 7-9 of this report details the data usedfor all technologies. For offshore wind this draws from the Governmentresponse to the banding review (GRBR). When modelling future costreductions for offshore wind evidence from the Crown Estate Study (theOffshore Wind Cost Reduction Pathways Study) and the Offshore Wind CostReduction Task Force report was also included. This is explained inmore detail in annex 2 of DECC's electricity generation costs2013.</p><p>DECC is currently considering responses and evidence received as part of the draft delivery plan consultation and this evidence may be used to inform final decisions on strike prices.<Sup>1</Sup><Sup /></p><p>Note:</p><p>https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223652/emr_consultation_annex_b.pdf<Sup>2</Sup>Note:</p><p>https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223940/DECC_Electricity_Generation_Costs_for_publication_-_24_07_13.pdf</p>