Contracts for Difference (CfD): proposed amendments to the contract
Download the full outcome
Detail of outcome
April 2019
The supplementary government response sets out our final policy decisions on the Direct Agreement (an agreement between a generator, its lenders and the Low Carbon Contracts Company (LCCC) protecting the lender’s interests in the event of a contract default by the generator), and any changes needed to the contract as a result of leaving the EU.
This response, along with our December 2018 response, fulfils our statutory obligation to explain why revisions to the Standard Terms have been made.
We have also published the final draft versions of the Standard Terms and Conditions, Generic Agreement and all contract variants.
The December 2018 government response sets out decisions on the proposed contract drafting we will use to implement the changes to the CfD scheme. The main changes being made to the contract are:
- an update to the definition of advanced conversion technologies (ACT)
- an updated and lower greenhouse gas (GHG) emissions threshold
- how we forecast the cost of CfD bids in auctions
- clarification of how provisions in the CfD contract such as force majeure (FM) and grid delay work
- simplification of the way some combined heat and power (CHP) schemes are treated
- introduction of the new category of Remote Island Wind projects
We have also published updated versions of:
and 2 new Technical Guidance Notes for Advanced Conversion Technologies (ACT) on Physical Separation Requirement and the ACT efficiency standard criterion.
Draft contract documents
The updated draft Standard Terms and Conditions and Generic Agreement reflect changes made to the contract following this and the December 2017 consultation. The consultations proposed changes to the CfD scheme from Allocation Round 3 (AR3) onwards, the first laid out potential policy changes and second proposed the drafting to implement those changes.
See the final draft versions of the Standard Terms and Conditions and Generic Agreement.
CfD Agreement
Generators who are allocated a CfD will also sign a CfD Agreement, which will incorporate the CfD Standard Terms and Conditions. The CfD Agreement is a bespoke document containing all the project-specific information, including:
- the estimated installed capacity
- the applicable Strike Price
- the details of the generator to which the Agreement applies
Detail of feedback received
We received 16 responses from a range of stakeholders, including:
- renewable electricity developers
- trade associations
- energy suppliers
Original consultation
Consultation description
The government consulted on proposed changes to the Contracts for Difference (CfD) scheme in December 2017, and has published its response.
We’re now seeking further views on how decisions on matters covered in that consultation will be implemented into the CfD scheme. We invite comments on the revised drafts of the CfD Standard Terms and Conditions and the CfD generic Agreement published alongside this document: the proposed amendments are shown as tracked changes in these documents.
We also welcome views on a small number of new proposals addressing associated issues that emerged during the original consultation, and on proposed minor and technical contract changes to ensure that the contract terms remain effective. These include:
- the way in which reference price forecasts are used during the allocation process
- the treatment of those technologies which are eligible to participate in the CfD scheme regardless of whether they deploy with Combined Heat and Power (CHP) (i.e. the ‘optional CHP’ technologies, currently advanced conversion technologies, anaerobic digestion and geothermal)
- Issue 7 of the CHP Quality Assurance (CHPQA) Standard and Guidance Note 44 giving effect to new increased efficiency requirements for CHP projects. New versions of both these documents are available on this page, with changes marked
- Brexit-related changes to ensure that the CfD contract functions effectively after the UK has left the European Union
- a series of proposed minor and technical changes to ensure that the contract terms remain effective
Documents
Last updated 17 April 2019 + show all updates
-
Supplementary government response published.
-
Government response published, along with draft terms and conditions for AR3.
-
First published.