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What is the Low Carbon Contracts Company?

Low Carbon Contracts Company Ltd (LCCC) is a private limited company, wholly owned by the Secretary of state for Energy and Climate Change, and designated under The Contracts for Difference (Counterparty Designation) Order 2014 as the counterparty to Contracts for Difference (CFDs) and Investment Contracts. LCCC has an independent board of directors.  LCCC commenced operations on 1 August 2014 and its primary functions are to be the counterparty to and manage CFDs and Investment Contracts, to administer and manage the operational and supplier obligation levy arrangements for CFD difference payments and to be responsible for CFD settlement activity.

What are the key activities LCCC is responsible for?

As the designated counterparty to CFDs, LCCC is responsible for entering into and managing CFDs throughout their term. LCCC is also responsible for forecasting CFD payments to generators and setting the supplier obligation levy that funds them. LCCC is responsible for the settlement of amounts payable by and to generators and suppliers and outsources this work to EMR Settlement Ltd. LCCC also engages with delivery partners in particular in relation to forthcoming CFD allocation rounds. LCCC also manages the administration and operation process for the Electricity Settlements Company Ltd (ESC).

How many contracts does LCCC manage?

Please visit our CFD Register for full details of all the CFDs and Investment Contracts we manage.  The CFD Register is regularly updated and contains high level information such as party names, technology type, strike price and capacity.

How is LCCC ensuring value for money for electricity consumers?

LCCC’s guiding principle as a company is to maintain investor confidence in the CFD scheme and minimise costs to consumers. In managing CFDs, we proactively and efficiently manage generator contracts and supplier payment processes to minimise costs to consumers.

How is LCCC managed and governed?

LCCC is led by its Chief Executive Neil McDermott and is governed by an independent board which is chaired by Dr Martin Read. LCCC is also governed by a Framework Document which sets out LCCC’s relationship with its sole shareholder, the Secretary of State for Business, Energy & Industrial Strategy, and LCCC’s company guiding principle.

Disclaimer

These frequently asked questions and responses (“FAQs”) have been prepared by Low Carbon Contracts Company Ltd ("LCCC") in response to queries raised by stakeholders in relation to the content of the Contract for Difference (“CFD”), which is comprised of the CFD Agreement and CFD Standard Terms and Conditions (“Conditions”), as published by the Department of Energy & Climate Change on 29 August 2014. The FAQs are also applicable to Investment Contracts (“ICs”) but users of this website are advised to fully review the equivalent clauses in their ICs as there are differences between the CFD and the IC. These FAQs are subject to and are provided on the basis of the following:
  • The FAQs do not supersede or replace the provisions of the CFD or IC and are not intended to and do not constitute legal, investment, commercial or operational advice and should not be relied upon as such. Users of this website should not place reliance upon these FAQs and should refer to the full terms of the CFD or IC, and/or consult their professional advisors where they require information or advice on matters relating to the CFDs or ICs generally and/or any CFD or IC to which they are a party.
  • The FAQs reflect the current thinking and approach of LCCC and should not be viewed as in any way as binding on LCCC.
  • It is our intention to keep the FAQs under review and to publish revised issues from time to time.
Defined terms used in the FAQs but not defined therein have the meanings prescribed to them in the CFD or IC (as applicable) and the Energy Act 2013.