Incentives Update — contracts for difference

Further to Walker Morris’s Energy Update last month, there have been a number of recent announcements worthy of note. As ever, developments continue to be fast-paced but the following may provide some season’s cheer to some in the sector.

On 4 December, the Department for Energy & Climate Change (DECC) published its ‘contracts for difference (CfD) contract terms and strike prices’ update.

In the article ‘ROCs or CfDs — the choice is not clear cut’, Walker Morris considered the draft CfD strike prices published by DECC and evaluated the risk profiles between CfDs and the renewables obligation (RO). DECC has now set the strike prices for the period 2014–15 to 2018–19, declaring that ‘CfDs will make it cheaper to deliver low-carbon generation by lowering the cost of financing projects — reductions that cannot be achieved through existing policy instruments, such as the RO’…

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