FAQs

Historical ILR and TRA data can be found at Settlement Data for All Roles - EMR Settlement Limited (Section “Key Payment Figures”)

LCCC's CfD forecasting model relies on a Monte Carlo simulation, typically generating 10,000 different future scenarios, all simulating hourly prices and generation.

In individual simulations, we model capture price differences (the difference of volume-weighted average IMRP (Intermittent Market Reference Price) and time-averaged IMRP). The typical values are around 5% for a quarter, but occasionally reach extremes as large as 25%.

This simulation process produces an extensive dataset compromising around 22 million rows of data for each forecast. We publish the average results of these 10,000 simulations averaged over the quarter by firstly averaging the price and generation for each hour across the simulations and then we do a further average (prices) and summing (generation) for the quarter.

Due to this process, trying to derive capture price differences using averaged forecast generation and averaged prices published on our website is not representative of the effect being modelled simulation-to-simulation.

LCCC publishes the forecast CfD generation for each quarter for the advanced forecast in our data portal. In response to supplier feedback, we have added the forecast CfD Capacity as an additional column to the dataset.

Unfortunately, LCCC cannot accommodate this due to regulatory constraints. These regulations explicitly state that adjustments are permissible only "where the CFD counterparty reasonably believes there is a high likelihood of being unable to meet all financial obligations" or "when there is a significant over-collection from suppliers."

Useful Links:

CFD Supplier Obligation regulations: The Contracts for Difference (Electricity Supplier Obligations) Regulations 2014 (legislation.gov.uk), as amended

LCCC forecast the ILR and the TRA a quarter in advance as per the regulations. To forecast these values, LCCC produces forecasts for the IMRP (Intermittent Market Reference Price) and BMRP (baseload Market Reference Price) using forward prices. A BPA is triggered based on a combination of factors: movement of forward prices, unexpected outages of CfD plants, trend of the forward prices and volume of TRA (Total Reserve Amount). Therefore, a BPA might not always be triggered by specific price movements as each quarter is different.

LCCC provides Ofgem with forecasts on CfD payments and Eligible Demand. Part of this information is publicly available and can be found in the data portal. For more information on how exactly Ofgem uses this information and which determination run is used to update the calculation of the price cap please contact Ofgem.

Currently it is updated in April and it will include the contracts awarded in the latest AR (Allocation Round).

LCCC can provide the adjusted values for the advanced forecast for the total CfD generation in a quarter but not for each technology separately. Due to confidential information, we cannot provide more granularity on this. More specifically, RQM and CHPQM are deemed sensitive information, and we cannot share any data that might result in identifying these values for specific plants. Inclusions of the total CfD generation for the advanced forecast in the data portal is a feature that is under development.

LCCC performs the SPA (Strike Price Adjustment) calculations for all the CfD contracts annually as per the relevant CfD clauses and communicates the revised Strike Prices to the Generators no later than the 5th business day post the 1st of April each year. This will then be visible in the CfD register shortly after

• In response to the feedback we receive from time to time, we make continuous improvements that will enhance the transparency and consistency of the data we utilise for our forecasting processes, as well as the methodology we employ.
• Our aim is to give greater supplier certainty and help mitigation of supplier exposure to market prices volatility. However, it's essential to acknowledge that the data may contain sensitive and confidential information that we are unable to disclose externally. We do, however, share information about our inputs during our quarterly webinars. Furthermore, we work to deliver continuous improvements to enhance our transparency to provide our suppliers with more comprehensive insights.

LCCC’s forecast assumptions are based, in part, on our prediction of generators’ behaviour in response to market conditions. This information is commercially sensitive, and we cannot share the exact details of our assumptions with the public. With the current high volatility in the market, these assumptions can change significantly between the determination runs.

The official Start Dates, and expected start dates for all generators are available on the LCCC website. However, the start date assumptions LCCC makes for the quarterly obligation period forecast might differ from what is published, based on LCCC’s knowledge of the Facility, confidential information provided by the generator and predictions of generators’ behaviour in response to market conditions. Similarly, the start dates for the advanced forecast are based on the information on the LCCC website, on generators’ updates and on LCCC’s assumptions following the market conditions. The information, other than what is available on the website, is commercially sensitive, and we cannot share the exact dates of our assumptions with the public.

In response to Supplier feedback, we have implemented changes based on feedback from suppliers, These changes enable the following[RL1] :

• Aligning determination run announcement dates throughout the year.
• Moving to a market reference price window instead of using prices of a specific day.

LCCC is committed to making continuous improvements to our modelling functionality which may affect the market price reference window, and [RL2] we may from time to time issue consultations to that effect.

Any inquiries regarding the expected costs associated with the Nuclear RAB should be directed to Ofgem, as they are responsible for determining the revenue stream to the licenced nuclear company and, consequently, the costs borne by suppliers. LCCC, on the other hand, is responsible for setting the ILR (Interim Levy Rate) / TRA (Total Reserve Amount) for this scheme based on the figures provided by Ofgem and collecting the payments.

The regulations, now in force, allow for collections in relation to Nuclear RAB to start with one (1) month notice of the ILR/TRA (this is two (2) months less notice than the ILR/TRA in CFD regulations). All settlement systems and services to enable and support this have been built. Naturally LCCC will push where possible for the maximum visibility to electricity suppliers.

Link to Regulations - https://www.legislation.gov.uk/uksi/2023/254/contents/made