Collection: Electricity Market Reform: Contracts for Difference

By HM Government

A Contract for Difference (CFD) is a private law contract between a low carbon electricity generator and the Low Carbon Contracts Company (LCCC), a government-owned company. A generator party to a CFD is paid the difference between the ‘strike price’ – a price for electricity reflecting the cost of investing in a particular low carbon technology – and the ‘reference price’– a measure of the average market price for electricity in the GB market. It gives greater certainty and stability of revenues to electricity generators by reducing their exposure to volatile wholesale prices, whilst protecting consumers from paying for higher support costs when electricity prices are high.

On this page you can access documents published by DECC in the development of CFD policy and the CFD websites of our delivery partners the Low Carbon Contracts Company and National Grid and details of arrangements for the Offtaker of Last Resort.

External links

  • CFD Implementation Plan. This document provides potential participants in the CFD scheme and electricity suppliers with details of the key implementation activities and milestones for the first CFD Allocation Round in 2014 and subsequent settlement
  • Low Carbon Contracts Company. A private company, owned by the Department of Energy and Climate Change (DECC), Low Carbon Contracts will manage the new Contracts for Difference (CFD) introduced by Government as part of the ambitious EMR programme.

  • EMR Delivery Body. National Grid has been appointed as the Delivery Body for Contracts for Difference, responsible for publishing CFD application/allocation guidelines and running the CFD allocation process.

Source:: Collection: Electricity Market Reform: Contracts for Difference