CfD Stakeholder Bulletin — 9 July 2020
Summary
DESNZ allowed electricity suppliers to defer part of their CfD obligation increases from Q2 2020 to Q2 2021 due to coronavirus measures. The amendment came into force on 8 July 2020, ahead of LCCC's quarterly reconciliation. This shifts supplier payment timing but does not change the total obligation amount.
Why it matters
This is temporary cash flow relief for suppliers during the pandemic, not structural reform. The obligation cost remains unchanged — suppliers pay the same amount one year later. As such, this delays cost recovery from consumers but does not alter the fundamental CfD cost allocation mechanism.
Key facts
- •Deferral from Q2 2020 to Q2 2021
- •Regulation effective 8 July 2020
- •Applies only to coronavirus-related obligation increases
Timeline
Areas affected
Related programmes
Memo
Contracts for Difference: Stakeholder Bulletin 9 July 2020 The amended Contracts for Difference (Electricity Supplier Obligations) Regulations The Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020 came into force yesterday (8 July) in advance of the LCCC carrying out the quarterly reconciliation process for quarter 2 of 2020. These Regulations allow the deferral of part of an increase in suppliers’ obligations that arose from measures introduced to reduce the spread of coronavirus from quarter 2 2020 to quarter 2 2021. This will minimise the impacts on suppliers at a time when they are facing significant other pressures. The consulation and government response contain further information on how these Regulations will work in practice. Please direct any queries on this bulletin to the BEIS Contracts for Difference Team at BEISContractsforDifference@beis.gov.uk. General Data Protection Regulation This stakeholder bulletin is being circulated to people who have opted in to the Contract for Difference stakeholder contact list. We issue these stakeholder bulletins as a convenience to interested parties, however it is not in any way essential to be on this list to participate in major consultations or allocation rounds. Purpose & scope of this list: This list is managed by the Department for Business, Energy and Industrial Strategy (BEIS) (and any successor departments) and will be used to inform interested parties of policy developments relevant to the Contract for Difference scheme for renewable energy projects (and any direct successor schemes). It is not used for any other purposes. To be removed from the circulation list: Please send a blank e-mail with the subject ‘opt out’ (if the receiving e-mail you use is different to the one you send the e-mail from, include that e-mail address in the subject of the e-mail) to BEISContractsForDifference@beis.gov.uk. If you have received this indirectly and want to be added to this list: Send a blank e-mail with the subject line ‘opt in’ to BEISContractsForDifference@beis.gov.uk. You can withdraw your consent to opt in at any time. We will normally keep your address on this list until you: a) withdraw your consent to opt in, b) the scheme closes without any successor, c) we receive reports your email address is no longer operational, or d) you do not respond to a periodic request from us to reconfirm your desire to opt in.