Consultation outcome

EMR: Changes to the CFD supplier obligation

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This consultation has concluded

Download the full outcome

Government response to Changes to the CFD supplier obligation and Electricity Intensive Industries exemption from CFD costs - Amendments to the Balancing and Settlement Code

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Detail of outcome

This publication provides the Government response to two Supplier Obligation consultations: ‘EMR: Changes to the CFD supplier obligation’ and ‘Electricity Intensive Industries exemption from CfD costs: Amendments to the Balancing and Settlement Code’.

It sets out the Government’s response to stakeholder feedback and the final policy positions for:

  • The exemption from the costs of the CFD for suppliers to Electricity Intensive Industries;
  • The exemption from the costs of the CFD for supply from renewable sources in other EU Member States; and
  • Minor and technical changes required to the Contracts for Difference (Electricity Supplier Obligations) Regulations.

We have also published the draft amendments to the Balancing and Settlement Code (BSC) which will allow the EII exemption to be applied.

Alongside the publication of the Government response, the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015 and amendments to the BSC have been laid in Parliament.

BIS has published the Government response to the Electricity intensive industries: relief from the indirect costs of renewables.

Original consultation

Summary

This consultation is seeking views on several proposed changes to the CFD supplier obligation. The changes will be reflected in secondary legislation which we intend to lay in Parliament in early 2015, to come into force (subject to the will of Parliament) before the first supplier obligation payments are due from 1 April 2015.

This consultation ran from
to

Consultation description

This consultation is seeking views on several proposed changes to the CFD supplier obligation: the implementation of exemptions from CFD costs for electricity intensive industries and imported renewable electricity; and minor and technical amendments to the CFD Supplier Obligation regulations. The changes will be reflected in secondary legislation which we intend to lay in Parliament in early 2015, to come into force (subject to the will of Parliament) before the first supplier obligation payments are due from 1 April 2015.

  • the introduction of an exemption from the cost of CFD payments for the most electricity intensive businesses;
  • the introduction of an exemption from the cost of CFD payments for eligible imported renewable electricity
  • several minor and technical amendments to the supplier obligation regulations to ensure they better reflect the policy intent.

The chapter on the implementation of an exemption for the most electricity intensive businesses is a joint DECC and Department of Business, Innovation and Skills (BIS) consultation. A separate consultation on eligibility for the exemption from CFD costs for electricity intensive businesses is currently open for comments until 23 October.

The changes will be introduced via new regulations (The Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations), which will also amend The Contracts for Difference (Electricity Supplier Obligations) Regulations 2014.

We expect to lay the regulations in Parliament in early 2015 and for them to come into force (subject to Parliamentary consent) before the first supplier obligation payments are due from 1 April 2015. The earliest that electricity intensive businesses will be able to claim exemption from CFD costs will be October 2015, subject to State Aid clearance.

The consultation closes on 5 November. Responses should be sent to <secondarylegislationemr@decc.gsi.gov.uk >.

More information on EIIs can be found on the main EMR webpage, and the main BIS page on EIIs:

Documents

Supplier Obligation Consultation

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Annex A - The Electricity Supplier Obligations (Amendment & Excluded Electricity Regulations

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Annex B - Impact Assessment on eligibility for an exemption from the costs of Contracts for Difference

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Impact of exemptions from the CFD - Vivid Economics and Cambridge Econometrics report

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Published 25 September 2014
Last updated 19 January 2015 + show all updates
  1. Government response to Changes to the CFD supplier obligation and Electricity Intensive Industries exemption from CFD costs - Amendments to the Balancing and Settlement Code consultations (single response for 2 consultations).
  2. First published.