Low Carbon Contracts Company (LCCC) has adjusted the Interim Levy Rate (ILR) for Q2 2023. The Quarterly Obligation Period started on 1 April 2023 and ends on 30 June 2023. The effect of these changes will take place on 5 June 2023. Until then the existing values will be in place: ILR = £3.819/MWh. No adjustment has been made to the Total Reserve Amount (TRA).
The amounts for the adjustment for Q2 2023 are:
Adjusted ILR = £5.500/MWh
In making this adjustment, LCCC has considered its cash position and the recent downward price trend in the power markets. The adjustment has been set so that the TRA and ILR are sufficient to cover the Contracts for Difference (CfD) costs, reducing the risk that LCCC will not have enough money to make payments to generators, while minimising the impact on suppliers. Market prices for this calculation were taken as closing mid-prices on 23 April 2023.
LCCC will be monitoring market prices closely and will make an adjustment to the ILR and/or TRA if market prices move in such a way as to lead LCCC to expect over-collection or that the TRA and ILR may be insufficient to cover the CfD costs. Note that once the quarter has started, the TRA can only be increased, while ILR can be increased or decreased.
• On 5 May 2023, notices will be issued to confirm the ILR adjustment to active Suppliers in Q2 2023.
• On 2 June 2023, by 5:00pm Suppliers required to lodge sufficient Credit Cover using the adjusted ILR.
For further detail on LCCC’s calculations, please refer to our online CfD Levy Dashboards. Also, further information on the Credit Cover requirements is available in the news section on the EMRS website.