Guidance and Publications

CfD Supplier Obligation - Setting the first Interim Rate and Total Reserve Amount

Posted 18.12.2014

The Low Carbon Contracts Company (LCCC) has today announced the level of the Contracts for Difference (CFD) Electricity Supplier Obligation Interim Rate and the Total Reserve Amount that will apply for the first quarterly obligation period, which runs from 1 April to 30 June 2015. The Interim Rate of 3.5p per Megawatt hour and the Total Reserve Amount of £1,061,400.00 were determined at the Board meeting which took place on 16 December 2014.

Here's a brief breakdown of what to expect in the "CfD Supplier Obligation: Setting the First Interim Rate and Total Reserve Amount" document:

1. Purpose and Scope:
   • The document sets the Interim Rate and Total Reserve Amount for the CfD Supplier Obligation for the first quarterly period (1 April to 30 June 2015), detailing the methodology and rationale behind these determinations.

1. Interim Rate and Total Reserve Amount:
   • Announces the Interim Rate of 3.5p per MWh and the Total Reserve Amount of £1,061,400, explaining these values were determined using a forecasting model and probabilistic simulations.

1. Supplier Obligation Details:
   • Explains the CfD Supplier Obligation, a levy on electricity suppliers to fund CfD payments to generators, including the calculation methods and key variables impacting the Interim Rate.

1. Transparency and Engagement:
   • Highlights the launch of a Transparency Tool for stakeholders to understand the assumptions and calculations, and describes the engagement with industry groups to refine the forecasting model and tools.

This document provides essential information for electricity suppliers about their financial obligations under the CfD scheme, ensuring clarity and preparedness for the upcoming quarterly period.