Contracts for Difference: Drafting Amendments to the CfD Contract for Allocation Round 6

Overview

This consultation seeks views on proposed drafting changes to the Contracts for Difference (CfD) Standard Terms and Conditions and Private Network Agreement in advance of Allocation Round 6 (AR6), which is scheduled to open in March 2024. The proposed changes will:

• streamline the Know Your Customer (KYC) checks in order to ensure that generators provide relevant KYC information to the Low Carbon Contracts Company (LCCC) when required, along with stronger enforcement measures, including a new Operational Condition Precedent and the ability for LCCC to suspend CfD payments until KYC requirements are met
• amend the CFD Private Network Agreement to ensure that generators that directly supply offshore oil and gas facilities are ineligible for that Agreement in AR6 onwards, implementing the policy decision published in July 2023 in the Government Response to Considerations for Future Contracts for Difference Rounds – including AR6
• adjust the Change Control Procedure in Annex 2 of the Standard Terms and Conditions to introduce a revised threshold requiring a majority (more than 50%) of affected generators to trigger a Classification Objection dispute, a new process requiring all such disputes to be handled as a single dispute, as well as several new definitions to reflect new drafting
• amend the definition of Milestone Delivery Date (MDD) to allow the MDD to be extended where a Generator has not received confirmation from the Ministry of Defence that it has met certain obligations in relation to mitigating adverse effects on defence radar systems

The proposed drafting changes are shown as tracked amendments in the CfD Standard Terms and Conditions and CfD Private Network Agreement, published alongside this consultation document.

The consultation also invites views on how the 18-month MDD has been operating in practice to inform Government’s thinking on whether any changes might be needed for future allocation rounds

We welcome responses from anyone with an interest in the proposals, in particular those considering participating in AR6.