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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.
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
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.
The adjusted Interim Levy Rate takes into account accrued payments from suppliers at the higher interim levy from 1– 9 October.
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).
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).
These frequently asked questions and responses (“FAQs”) have been prepared by Low Carbon Contracts Company Ltd ("LCCC") in response to queries raised by stakeholders in relation to the content of the Contract for Difference (“CFD”), which is comprised of the CFD Agreement and CFD Standard Terms and Conditions (“Conditions”), as published by the Department of Energy & Climate Change on 29 August 2014. The FAQs are also applicable to Investment Contracts (“ICs”) but users of this website are advised to fully review the equivalent clauses in their ICs as there are differences between the CFD and the IC.
These FAQs are subject to and are provided on the basis of the following:
- The FAQs do not supersede or replace the provisions of the CFD or IC and are not intended to and do not constitute legal, investment, commercial or operational advice and should not be relied upon as such. Users of this website should not place reliance upon these FAQs and should refer to the full terms of the CFD or IC, and/or consult their professional advisors where they require information or advice on matters relating to the CFDs or ICs generally and/or any CFD or IC to which they are a party.
- The FAQs reflect the current thinking and approach of LCCC and should not be viewed as in any way as binding on LCCC.
- It is our intention to keep the FAQs under review and to publish revised issues from time to time.
Defined terms used in the FAQs but not defined therein have the meanings prescribed to them in the CFD or IC (as applicable) and the Energy Act 2013.