How Contracts for Difference (CfDs) will work under Electricity Market Reform.
Contracts for Difference stimulate investment in low-carbon technologies (including renewables, nuclear and Carbon Capture and Storage (CCS)) by providing greater certainty of revenue that will encourage investment by reducing risks to investors and by making it easier and cheaper to secure finance.
The documents published today, 19 December, provide complementary information to the Electricity Market Reform (EMR) Delivery Plan published 19 December and the Electricity Market Reform Strike Prices and Contract Terms published on 4 December 2013. They set out a revised draft of the CfD and explain the changes that we have made since the previous draft was published in August.
Government has engaged extensively with a range of stakeholders on the development and implementation of its policy approach in developing the CfD. This policy will now be implemented through the CfD as set out in the December Draft.
We are aware that in respect of certain clauses that some stakeholders have had limited opportunity to comment on full-form drafting. Therefore stakeholders are invited to provide comments on how the policy has been given effect in the detailed drafting of the following clauses, by 27 January 2014:
BSUoS and TLM costs;
adjustments for Generation Taxes;
Qualifying Shutdown Events;
Fuel Measurement and Sampling Procedures
Market Reference Price
We are also seeking comments on our policy for Phasing.
Comments should be sent to email@example.com and be submitted using the template set out in the.
About the documents
This is a revised draft CfD that reflects feedback from a range of stakeholders on the version published in August. Most of the terms are fully drafted.
In this we have provided an explanation of the key elements of the revised draft CfD and highlight where there have been changes since the publication of the draft CfD clauses in August 2013. This document also sets out the Government’s policies on those aspects of the CfD contractual framework which have not yet been published in full-form contractual drafting. In this respect, this document sets out the detailed policy approach to phased offshore wind projects and also explains how the sustainability requirements applying under the Renewables Obligation will be implemented into the CfD.
In the overview document we refer to a feedback template that we require stakeholders to use to provide comments.
Published in August 2013
In this we highlighted the significant policy changes to the approach in the November Operational framework and CfD Heads of Terms, many of which were informed by engagement with industry and other stakeholders.
This is a draft contract spine of a CfD published in August 2013. It is superseded by the revised draft published in December 2013.
The key elements of the detailed allocation process and provided information on its implementation.
This paper reports on the summary conclusions of analysis conducted by DECC to answer the questions:
How does the break even Feed-in Tariff with Contracts for Difference (CfD) strike price change with the contract length of the CfD for renewable generating technologies?
Which contract length gives the lowest net present value of support payments to generators?
Ways to respond:
Write to: EMR CfD Design and Implementation Team Area 4D Department of Energy & Climate Change Whitehall Place London SW1A 2AW