Suppliers - FAQs

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What level of payments could be required from suppliers if one supplier fails and will LCCC be modelling this?

LCCC is not intending to perform modelling of mutualisation payments as these are only triggered in the event that a supplier fails.  The size of the missed payments to be mutualised would depend entirely on the market share of the defaulting supplier and the most recent settlement run data available.

How will suppliers know if there are irregularities on the Generator payment side (e.g. a Generator failing to pay the LCCC?)

The CFD Settlement Services Provider will not inform suppliers of differences in Generator payments. The CFD Settlement Services Provider will provide Suppliers via the Quarterly Reconciliation Report the Daily Net Generator Payments for each day of the quarter. This is the total amount paid to CFD Generators. LCCC has published a “Transparency Tool” which provides an insight into the calculations behind the interim rate levy and total reserve amount

Why has the Interim Levy Rate been revised downwards? Does LCCC have an updated assumption on when Drax will receive State Aid approval and commence generation?

LCCC’s determinations of the Interim Levy Rate are based on assumptions (as further explained in our Transparency Tool), including assumptions relating to the date for the EU decision on State Aid approval for the relevant project. The timing of state aid decisions is a matter for the European Commission, however LCCC has considered the matter and made an assumption that the likely timing for the EU decision on state aid approval has moved back. LCCC has also noted that the generator has not commenced generation under the CFD (and therefore that LCCC does not have to accrue for the relevant amount of CFD payments at the current time). Accordingly, LCCC has made an in-period adjustment to the Interim Levy Rate.

Does LCCC anticipate the Interim Levy Rate for 1 – 9 October 2016 being reconciled with a rebate back to suppliers or does the setting of the adjusted ILR take into account accrued payments from suppliers at the higher original ILR?

The adjusted Interim Levy Rate takes into account accrued payments from suppliers at the higher interim levy from 1– 9 October.

Is the 22/09/2016 Transparency Tool 15 month forecast based on the same assumptions as the in period adjustment?

The latest forecasts on the Transparency Tool reflect an assumption that the relevant generator will commence CFD generation such that it is generating for the whole of quarterly obligations periods in the forecast (i.e. 1 January 2017 – 31 December 2017). Accordingly, there are no changes to the relevant assumptions relating to this aspect (i.e. no changes are needed).

Will the Transparency Tool be updated?

A. LCCC updates the 15 month forecasts on a quarterly basis. LCCC therefore will not update the Transparency Tool for any intervening changes (e.g. updated assumptions as to market prices etc).