Procurement of Evaluation of Contracts for Difference

Description

***** THIS IS AN AWARD NOTICE, NOT A CALL FOR COMPETITION ***** This procurement is being concluded following a mini competition under the Crown Commercial Services DPS RM6126 - Research & Insights. Brief Description of Requirement The CfD scheme is the government's main mechanism for supporting low-carbon electricity generation. CfDs incentivise investment in renewable energy through a fixed price over a 15 year contract. This in turn provides direct protection from volatile wholesale prices and protect consumers from paying increased support costs when electricity prices are high. Renewable generation projects located in Great Britain that meet the eligibility requirements can compete for a CfD. There have been 7 allocation rounds (AR), to date, which have seen a range of different renewable technologies competing against each other for a contract. Successful developers of renewable projects enter into a private law contract with the Low Carbon Contracts Company (LCCC), a government-owned company. Developers are paid a flat (indexed) rate for the electricity they produce over a 15-year period; the difference between the 'strike price' (a price for electricity reflecting the cost of investing in a particular low carbon technology, determined via a competitive auction) and the 'reference price' (a measure of the average market price for electricity in the GB market).