In its role as System Operator, National Grid is designated as the EMR Delivery Body. It is responsible for administering the two key mechanisms (Contracts for Difference and Capacity Mechanism) to provide incentives for the investment required in our energy infrastructure.
Responsibilities for delivering the CfD mechanism include:
- Conducting analysis to support the Department for Business, Energy and Industrial Strategy (BEIS) in setting of Administrative strike prices
- Managing the Registration and Application processes
- Administering the Assessment and Qualification of applications and to notify Applicants of the decision of qualification
- Managing and maintaining systems for CfD qualification and allocation
- Providing valuation of all applications and subsequent assessment as to whether an auction is required to determine which applicants will be awarded a CfD
- Reporting the value of applicants to BEIS and producing reports as required
- Running the CfD Allocation Process
- Working with the Independent Auditor (Deloitte) to provide assurance that the EMR DB has complied with the relevant CfD legislation and Allocation Framework
- Providing determination of disputes regarding the decision of CfD qualification (Tier 1 Disputes)
- Providing Ofgem with the rationale for any Appeals (Tier 2 Disputes)
- Providing LCCC with the information necessary to offer a CfD.
Stages of CFD processes and LCCC role
BEIS
Sets the policy and governance arrangements for the scheme, including the allocation rules, timing and budgets of allocation rounds, and Administrative Strike Prices.
Reviews Supply Chain Plans.
LOW CARBON CONTRACTS COMPANY
Processes Minor and Necessary Modification requests during this stage..
DELIVERY BODY
Manages and operates the front end of the process from initial registration, CfD applications, assessing the eligibility of applications for generic CfDs, conducting reviews for non-qualification (Tier 1 Disputes) through to CfD allocation.
OFGEM
Runs the Qualification Appeals process (if needed).
LOW CARBON CONTRACTS COMPANY
Signs the contract.
LOW CARBON CONTRACTS COMPANY
Manages CfDs throughout their lifetime including through various milestones during the project delivery phase, such as the Milestone Delivery Date 12 months from date of signing.
Makes CfD payments during the operations phase which can commence at any point within the Target Commissioning Window.
The Longstop Date is determined within the CfD as 12 months after the end of the Target Commissioning Window. If the Operational Conditions Precedent are not fulfilled by the Longstop Date, the CfD can be terminated.
Roll-over each segment to find out more about what is involved and the organisation responsible. For a more detailed view of the forthcoming CfD Allocation Round, visit our timeline here.