The Contracts for Difference (Miscellaneous Amendments) Regulations 2021

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Contracts for Difference (Definition of Eligible Generator) Regulations 2014 (S.I. 2014/2010) (“Eligible Generator Regulations”), the Electricity Market Reform (General) Regulations 2014 (S.I. 2014/2013) (“EMR Regulations”) and the Contracts for Difference (Allocation) Regulations 2014 (S.I. 2014/2011) (“Allocation Regulations”). These Regulations form part of the legislative framework underpinning the Contracts for Difference (CFD) scheme under section 6 of the Energy Act 2013. The CFD scheme is designed to encourage low carbon electricity generation by awarding subsidies accessed through a private law contract, which is secured in a competitive allocation round.

Part 2 amends the Eligible Generator Regulations and omits “biomass conversion station” from the list of eligible generators that can apply for a CFD.

Part 3 amends the EMR Regulations to effect a series of amendments to the supply chain assessment process. There has been a revision to the criteria that eligible generators must meet before their supply chain application or supply chain implementation application is approved. An eligible generator that received a supply chain statement may apply to the Secretary of State for a statement (“a supply chain implementation statement”) that confirms the establishment or alteration of a generation station is making a material contribution to the development of supply chains, i.e. the chains of suppliers of goods or services in relation to the construction, alteration, maintenance or operation of generating stations. If the eligible generator has a CFD arising from an allocation round, by virtue of the Allocation Regulations, then they can only apply for supply chain implementation statement once they have completed a milestone requirement as set out in their CFD. The confidentiality provisions have been extended to include all the supply chain assessment process.

Part 4 amends the Allocation Regulations to effect a series of amendments to the competitive allocation round. The substantive changes are ensuring exclusions from an allocation round are for the next applicable allocation round, an amendment to the operation of the budget so a soft constraint may be used in relation to capacity and inserting conditions an applicant must meet if they submit an application for a floating offshore wind project.

Part 4 also effects various administrative amendments in the Allocation Regulations which include extending the period in which delivery years can be to 31st March 2035, an amendment to ensure various dates cannot be amended after they have passed and an amendment to allow 5 days’ notice when varying key dates of an allocation round.

Insofar as these Regulations have an impact on the costs of business and the voluntary sector an impact assessment has been carried out and is available from the Department for Business, Energy and Industrial Strategy at 1 Victoria Street, London SW1H 0ET and published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.