Consultation outcome

Contracts for difference Supplier Obligation: Improving efficiency & transparency

This consultation has concluded

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Detail of outcome

In September 2015, the government issued a consultation that proposed a series of technical amendments to the CFD supplier obligation with the aim of reducing costs to consumers through improving efficiency and transparency. This document sets out the government response to that consultation.

This document summarises the responses that have been received and sets out the policy decision and next steps.

The associated regulations and impact assessment have been laid before Parliament alongside publication of this government response will soon be available on the legislation.gov.uk website.

Original consultation

This consultation ran from to

Summary

A consultation on changes to the contracts for difference (CFD) Supplier Obligation, to improve efficiency and transparency, reducing consumers’ CFD costs.

Documents

CFD Supplier Obligation consultation on improving transparency and efficiency

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CFD Supplier Obligation consultation Impact Assessment

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Draft regulations

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Consultation description

Update - 19 October

Draft regulations were published on 19 October 2015 to help inform respondents to the consultation on how the proposals could be implemented. For ease of reference these are provided as a single set of consolidated regulations with ‘track changes’ to show the proposed amendments. We are not consulting on the regulations, but any comments on drafting would be welcome by 13 November 2015. Note that not all the changes proposed in the consultation document are yet to be reflected in the draft regulations. We will also be considering whether transitional measures are required.

The consultation and impact assessment set out proposed amendments to the contracts for difference (CFD) Supplier Obligation. The amendments aim to lower the costs of CFDs that are passed onto consumers by:

  • Improving the efficiency of the CFD Supplier Obligation design
  • Improving the transparency around CFD costs
  • Making minor and technical amendments that clarify provisions in the regulations

The department for Business, Innovation and Skills (BIS) are jointly consulting on amendments to the list of sectors within which electricity intensive companies can apply for an exemption from the costs of CFDs.

This consultation is relevant to electricity suppliers in Great Britain, low carbon electricity generators who hold or intend to apply for CFDs, electricity consumers and their representatives, ELEXON, the Low Carbon Contracts Company and other stakeholders with an interest in the energy sector.

CFD Supplier Obligation

CFD scheme