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What are CFD payments?

Under the CFD, ‘difference’ payments are made by either LCCC to the generator or vice versa depending on whether the ‘reference price’, being the average market price for electricity at the relevant point in time, is greater than or less than the ‘strike price’. When the reference price is less than the strike price LCCC pays the generator the difference between the strike price and the reference price. Conversely, when the reference price is greater than the strike price the generator will pay the difference to LCCC.