CfD Allocation Round 3—final contracts and statutory notices published

CfD Allocation Round 3—final contracts and statutory notices published

The Department for Business, Energy and Industrial Strategy (BEIS) has published the final contract documentation and issued the required statutory notices for the Contracts for Difference (CfD) third Allocation Round (AR3) that opens on 29 May 2019. These include the final versions of the Standard Terms and Conditions, the generic front-end CfD agreement and the contract variants for CfD AR3. BEIS has also published the final statutory notices required and the allocation framework that sets out the rules and eligibility requirements for CfD AR3.

Each CfD contract issued in comprises two components:

  • the relevant front-end CfD Agreement
  • the Standard Terms and Conditions

The final CfD AR3 contract documentation published by BEIS includes:

  • the generic CfD Agreement—this forms the front-end section of the CfD contract and contains project-specific information that tailors the application of the Standard Terms and Conditions. The generic CfD Agreement is used unless one of the other published CfD Agreement variations is required
  • the Standard Terms and Conditions
  • CfD Agreement variations—required in certain circumstances, for example private network terms or unincorporated joint ventures

The statutory notices published include:

  • CfD AR3 Budget Notice and accompanying explanatory note—which confirms an overall budget of £65m (based on 2011–12 prices) for delivery years 2023–24 and 2024–25, a 6GW capacity cap (subject to state aid approval) and sets out the various strike prices. It also confirms that no maxima or minima will apply for CfD AR3.
  • CfD AR3 Allocation Round Notice—confirms the key dates for CfD AR3 including a start date of 29 May 2019, an application deadline of 18 June 2019, and an end date of 29 November 2019. It confirms the eligible technologies, which are:
    • advanced conversion technologies
    • anaerobic digestion (>5MW)
    • dedicated biomass with CHP
    • geothermal
    • offshore wind
    • remote island wind (>5MW) (a new addition since the second allocation round)
    • tidal stream
    • wave
  • CfD AR3 Framework Notice and Allocation Framework—states which framework is applicable for CfD AR3 and sets out the rules for AR3 and the eligibility requirements. The Allocation Framework also sets out the specific requirements for remote island wind applications
  • the CfD AR3 Standard Terms Notice—sets out the figures to be used by the Low Carbon Contracts Company (LCCC), the CfD counterparty, to complete the appropriate standard terms
  • the Counterparty Costs Notice—applicants may apply to the LCCC to request small modifications to the CfD contract, provided they don’t exceed a resulting costs implication of over £18,000

An explanation of the changes to the CfD contract terms made in respect of CfD AR3 was set out in the supplementary government response published in April 2019, see: LNB News 18/04/2019 38

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