The Contracts for Difference (Allocation) Regulations 2014 in Northern Ireland
S.I. 2014/2011 · Made 31 July 2014 · Extends to United Kingdom
Electricity
Made 31st July 2014
Coming into force in accordance with regulation 1
The Secretary of State has before making these Regulations—
consulted the persons listed in section 24(1)(a) to (g) of the Energy Act 2013f1 and such other persons as the Secretary of State considered it appropriate to consult; and
had regard to the matters in section 5(2) of that Act.
In accordance with section 6(8) of that Act, a draft of this instrument was laid before Parliament and approved by a resolution of each House of Parliament.
Accordingly, the Secretary of State, in exercise of the powers conferred by sections 6(1), 10, 12(1) to (3), 13(2),(3) and (8) and 19 of the Energy Act 2013, makes the following Regulations:
Annotations to the whole text
Footnotes
- f1
Contents
- 4AEstablishing application windows
- 5AVarying application windows
- 10APrice and pot notices
- 10BEstimated budget notices
- 13ASustainable industry reward budgets
- 13BPublication
- 14ZAExcluded applications: decommissioning
- 14ATemporary site exclusions and exemption certificates
- 14BGrounds for granting exemption certificates
- 14CRequests for exemption certificates
- 14DRegister of sites to which a temporary site exclusion applies
- 20ADelivery body error in notices of determinations
- 27ZAFloating offshore wind CFD units
- 27ARemote island wind units
- 27BStatements in relation to sustainable industry rewards
- Chapter 5: Sustainable industry reward statements: supplemental
- 28ASustainable industry reward application
- 28BParticulars of sustainable industry reward application
- 28CProviding sustainable industry reward statement or refusing application
- 28DConfidentiality: sustainable industry reward applications
- 28ERevision or withdrawal of sustainable industry reward statement
- 42AUpdating the sustainable industry reward statement
- Part 10: Directions to offer to contract
- 57Directions under section 10 of the Act
- 58Obligation to notify the specified person
- 59Directions ceasing to have effect
- 60Publication of contracts
- 61Interpretation of Part 10
- Explanatory note
4AEstablishing application windowsF1
Subject to paragraphs (2) to (5), where the Secretary of State establishes an allocation round, the Secretary of State must by notice (“an application window notice”) establish an application window.
An application window notice must—
be given to the delivery body and the CFD counterparty; and
state—
the allocation round to which the notice applies;
the first date on which an application for a CFD to be allocated further to that round may be made (“the application opening date”);
the date by which an application for a CFD to be allocated further to that round must be made (“the application closing date”), which must not be earlier than 10 working days after the application opening date; and
which delivery year or years apply to any CFDs to be allocated further to the allocation round to which the notice applies.
The application opening date must not be earlier than—
the date which is 10 working days after the date of the application window notice; or
where the allocation round to which the application window notice applies is one to which a sustainable industry reward allocation framework applies, the date which is F2the day after the day the sustainable industry reward allocation process concludes.
Where the CFDs to be allocated further to an allocation round are restricted to particular types of eligible generator or eligible generating station, the application window notice must state the restriction.
Where an exemptions request notice is given, an application window notice which immediately follows the exemptions request notice must not state an application opening date which is earlier than 25 working days after the closing date stated in the exemptions request notice.
5AVarying application windowsF1
Subject to paragraphs (3) to (5), the Secretary of State may by notice (“an application window variation notice”) vary the application window by varying—
the application opening date, where that date has not yet passed; or
the application closing date, where that date has not yet passed.
An application window variation notice must—
be given to the delivery body and the CFD counterparty;
state the date on which it has effect;
identify the allocation round to which the notice applies; and
state the reasons for the variation effected by the notice.
No variation of the application opening date or the application closing date may be made where the application closing date would be earlier than 10 working days after the application opening date.
No variation of the application opening date or the application closing date may be made where the varied date would be earlier than 5 working days after the date of the application window variation notice.
Where the allocation round to which the application window variation notice applies is one to which a sustainable industry reward allocation framework applies, no variation of the application opening date may be made where the varied date would be earlier than F2the date which is the day after the day the sustainable industry reward allocation process concludes.
Where the delivery body receives an application window variation notice, it must as soon as practicable after receipt send a copy of the notice to each applicant who has made an application (which has not been withdrawn) in the round to which the notice applies.
10APrice and pot noticesF1
The Secretary of State must by notice (“a price notice”) specify the administrative strike prices applicable to applications in an allocation round.
Where the administrative strike prices in the price notice are stated by reference to a price which is not current at the date of that notice, the price notice must include a factor which, when applied to the administrative strike prices, converts the administrative strike prices into administrative strike prices current at that date.
The Secretary of State may by notice (“a pot notice”) specify descriptions of applications for the purpose of regulation 11(2)(c) (contract budget notices: pot).
The Secretary of State may revise a pot notice where that revision has effect more than 10 working days before the application opening date.
A price notice, pot notice and a revision to a pot notice must—
be given to the delivery body,
identify the allocation round to which the notice applies, and
be given no later than 10 working days before the application opening date.
10BEstimated budget noticesF1
This regulation applies where the Secretary of State makes a direction under regulation 54 (allocation reports) to the delivery body to make available details of the matters specified in regulation 54(2)(e) but the delivery body cannot provide the details without an estimated budget notice.
The Secretary of State must by notice (“an estimated budget notice”) specify as many of the following as the delivery body needs to make available the details referred to in paragraph (1)—
an estimated budget which is available for each delivery year applicable to an allocation round either for—
the whole allocation round, or
a description of applications specified in any pot notice in respect of the allocation round;
budgets which are reserved for descriptions of applications specified in the estimated budget notice (“estimated minima”);
maximum budgets which apply to descriptions of applications specified in the estimated budget notice (“estimated maxima”).
Where estimated maxima or estimated minima are specified, they may be expressed as—
a sum of money;
an amount of capacity of electricity generation; or
a combination of (a) and (b).
Where any budget referred to in paragraph (2) is expressed as an amount of capacity of electricity generation, the Secretary of State may specify in the estimated budget notice that a soft constraint applies to that amount, and in such a case, the amount of capacity of electricity generation may be exceeded, but only in accordance with the provisions of the contract allocation framework that applies to that allocation round.
The estimated budget notice must—
be given to the delivery body as soon as practicable; and
identify the allocation round to which it applies.
13ASustainable industry reward budgetsF1
Where the Secretary of State gives a sustainable industry reward framework notice in relation to an allocation round, the Secretary of State must by notice (“a sustainable industry reward budget notice”) specify the sustainable industry reward budget which is available for that allocation round.
The Secretary of State may, in a sustainable industry reward budget notice, specify any of the following—
budgets which are reserved for the sustainable industry reward applications described in the notice (“sustainable industry reward minima”);
budgets which must be prioritised for the sustainable industry reward applications described in the notice, and where those budgets are not exhausted, the remaining budgets may be used for the other sustainable industry reward applications (“sustainable industry reward flexible minima”);
maximum budgets which apply to the sustainable industry reward applications described in the notice (“sustainable industry reward maxima”).
The sustainable industry reward allocation framework must set out—
the time by which the sustainable industry reward budget notice must be published, which must be no later than the day before the day a notice under regulation 28C which includes a sustainable industry reward statement is given; and
whether any draft forms of the sustainable industry reward budget notice must be published, and the time by which they must be published.
A draft form of the sustainable industry reward budget notice need not set out the Secretary of State’s intentions as to the use of the description of budget mentioned in paragraph (1A).
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A sustainable industry reward budget notice, whether in F4... draft or final form, must—
be given to the delivery body and the CFD counterparty; and
identify the allocation round to which the sustainable industry reward budget notice applies.
13BPublicationF1
As soon as practicable after they are given to the delivery body, the Secretary of State must make the following publicly available—
the price notice;
the pot notice and a revision to that notice where it is revised;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Before, or no later than is reasonably practicable after, F3the first CFD notification being given, the Secretary of State must make publicly available—
the contract budget notice; and
the contract budget revision notice, where such notice is given.
14ZAExcluded applications: decommissioningF1
This regulation applies to an application in respect of a CFD unit that is to be altered by decommissioning part of an eligible generating station in order to replace that part.
An application mentioned in paragraph (1) is not an excluded application under the following paragraphs of regulation 14—
paragraph (5) (accreditation or registration);
paragraph (9) (funding under non-fossil fuel orders);
paragraph (10) (capacity agreement);
paragraph (13) (investment contract).
14ATemporary site exclusions and exemption certificatesF1
This regulation and regulations 14B to 14D apply where—
the offer lapsed in respect of a successful application (“a non-signature case”); or
a CFD was entered into and was subsequently terminated, and either or both of the following circumstances apply—
the CFD was terminated on a date which is earlier than F3the date determined in accordance with the CFD as the Milestone Delivery Date;
the reason for the termination was that the eligible generator failed to achieve the stages for delivery for that CFD unit which were required under the CFD to be met by the date determined in accordance with the CFD as the Milestone Delivery Date;
(each “a non-delivery case”).
Subject to paragraphs (4) and (5), an eligible generator may not make an application in respect of a CFD unit in the next F5two allocation rounds if the site of the main generating structures of the CFD unit is the same as, or includes any part of, an excluded site; and in this paragraph, F6“next two allocation rounds” means the first two allocation rounds in which the eligible generator could otherwise have made such an application after the allocation round further to which the CFD notification in respect of the CFD referred to in paragraph (1) was given.
The prohibition in paragraph (2) does not prevent an eligible generator from making a sustainable industry reward application in the next two allocation rounds referred to in that paragraph.
The exclusion described in paragraph (2) is a “temporary site exclusion”.
An eligible generator may in an allocation round make an application to which a temporary site exclusion applies, if the eligible generator—
holds an exemption certificate in respect of the application; and
provides that certificate to the delivery body with the application.
An eligible generator may in an allocation round make an application to which a temporary site exclusion applies where—
no exemptions request notice is published in respect of the allocation round; or
an exemptions request notice is published in respect of the allocation round and the date on which the temporary site exclusion is published in accordance with regulation 14D occurs—
5 or fewer working days before; or
on or after,
the closing date stated in the exemptions request notice.
14BGrounds for granting exemption certificatesF1
Where a request is made in accordance with regulation 14C(6), the Secretary of State may give an exemption certificate to an eligible generator (“E”) who intends to make an application to which a temporary site exclusion applies.
No exemption certificate may be given unless the Secretary of State is satisfied that at least one of the following grounds applies in respect of the intended application.
Ground 1 is that—
the area of site A is less than 51% of the area of the excluded site; and
the area of the excluded site is less than 51% of the area of site A.
Ground 2 is that—
E holds a relevant property interest in all of site B;
the interest was held by E before 14th October 2014;
E is not the person (“P1”) who, as appropriate, did not accept the offer of a CFD before the offer lapsed or was a party to the CFD which was terminated; and
where E is a body corporate or a limited liability partnership and E is not P1, E is not associated with P1.
Ground 3 is that—
E holds a relevant property interest in all of site B;
the interest did not exist before 14th October 2014;
E acquired that interest from a person (“P2”) who held a relevant property interest in all of site B before 14th October 2014;
E is not the person (“P3”) who, as appropriate, did not accept the offer of a CFD before the offer lapsed or was a party to the CFD which was terminated;
P2 is not P3 and where P2 is a body corporate or a limited liability partnership and P2 is not P3, P2 is not associated with P3; and
where E is a body corporate or a limited liability partnership and E is not P3, E is not associated with P3.
Ground 4 (which applies only where a temporary site exclusion arises by reason of a non-signature case) is that—
relevant court proceedings were commenced or concluded after the last date on which the successful application could have been withdrawn from the allocation round; and
the applicant’s ability to comply with the terms of the CFD which was offered would have been subject to a “Material Adverse Effect” (as that term was defined in the CFD) by reason of—
those proceedings being commenced; or
the result of the concluded proceedings.
Ground 5 (which applies only where a temporary site exclusion arises by reason of a non-delivery case) is that the CFD was terminated by reason of a “Qualifying Change in Law F2Relevant Construction Event” or “Sustainability Change in Law” (as those terms were defined in the CFD).
In this regulation—
“relevant court proceedings” means—
- (a)
court proceedings made against the applicant who made the successful application; or
- (b)
a judicial review or a statutory appeal in relation to any applicable planning consents provided in compliance with regulation 23 in respect of the successful application;
- (a)
“relevant property interest” means any of the following—
- (a)
an agreement for lease;
- (b)
an option for lease;
- (c)
a freehold;
- (d)
a leasehold;
- (a)
“site A” means the site of the main generating structures of the F3CFD unit to be described in the intended application;
“site B” means site A to the extent to which it coincides with the excluded site.
Where E, P1, P2 or P3 is an unincorporated association, the conditions relating to E, P1, P2 or P3 in paragraphs (4) and (5) apply as if E, P1, P2 or P3 means any member of the unincorporated association.
For the purposes of the definition of “relevant court proceedings”, where the applicant is an unincorporated association, court proceedings include proceedings against any member of the unincorporated association.
14CRequests for exemption certificatesF1
Paragraph (2) applies where Secretary of State is minded to establish F2an application window (“a prospective application window”).
Where this paragraph applies, subject to paragraph (3), by no later than 50 working days before the date F3(“the prospective application opening date”) which the Secretary of State is minded to set as F4the application opening date of a prospective application window, the Secretary of State must publish a notice (“an exemptions request notice”).
An exemptions request notice is not required where, by the date at which a notice would otherwise be required under paragraph (2), no temporary site exclusion applies at that date in respect of the F5prospective application window.
An exemptions request notice must apply to each prospective application window which is to have the same F6prospective application opening date.
An exemptions request notice must—
state the F7prospective application opening date;
identify each prospective application window to which the notice applies;
describe the types of eligible generator and eligible generating station to which each F8prospective application window is likely to apply;
state the delivery years which are likely to apply to each prospective application window; and
state the date by which a request for an exemption certificate must be made to the Secretary of State (“the closing date”), which must be no earlier than 15 working days after the date of the notice.
A request for an exemption certificate must—
only be made by an eligible generator;
be in the form and manner required by the Secretary of State;
include details of the application (“the intended application”) which the eligible generator intends to make;
specify the prospective application window in which the intended application is to be made;
include the plan (“the site plan”) contained in, or referred to by, the applicable planning consents which are to accompany the intended application which identifies the site of the main generating structures of the F9CFD unit;
state each ground of exemption relied upon and include the information necessary to enable the Secretary of State to determine whether or not each such ground applies; and
be made by the closing date.
By no later than 25 working days after the closing date, the Secretary of State must give the eligible generator who has made the request—
an exemption certificate; or
a notice (“an exemption refusal notice”) stating that the request has been refused and giving reasons for the refusal.
The Secretary of State must as soon as practicable give a copy of each exemption certificate and exemption refusal notice to—
the CFD counterparty; and
the delivery body.
In this regulation—
“exemption certificate” means a document which—
- (a)
includes a summary of the intended application and the site plan and includes (or refers) to a plan which identifies the excluded site; and
- (b)
states—
- (i)
each ground of exemption which the Secretary of State has determined applies to the intended application; and
- (ii)
that the Secretary of State has determined that the eligible generator named in the document may make the intended application in the prospective round identified in the document;
- (i)
- (a)
“ground of exemption” means any of the grounds 1 to 5 described in regulation 14B.
14DRegister of sites to which a temporary site exclusion appliesF1
The CFD counterparty must establish and maintain a register of each excluded site to which a temporary site exclusion applies and the register must contain—
the grid reference co-ordinates and such other information, including a plan to a suitable scale, which enables each such site to be readily identified;
the date on which the CFD notification was given for (as applicable)—
the CFD the offer of which lapsed; or
the CFD which was terminated;
in a non-signature case, the name of the eligible generator who made the successful application in respect of which the offer lapsed; and
in a non-delivery case, the name of the eligible generator who was a party to the CFD which was terminated.
Where an eligible generator is an unincorporated association, the requirements relating to the eligible generator in paragraph (1)(c) and (d) apply in relation to the unincorporated association and each member of the unincorporated association.
The register must be made publicly available.
20ADelivery body error in notices of determinationsF1
The delivery body may, if provided for in the contract allocation framework which applies to the allocation round, give—
to an applicant who has received a non-qualification determination, an amended non-qualification determination; and
to an applicant who has received a notice stating that the application made by the applicant is a qualifying application under regulation 19, a non-qualification determination.
If the contract allocation framework which applies to the allocation round provides for determinations to be given under paragraph (1)(a) or (b), it may also provide for regulations 19, 20, 21, 29, 31, 32, 33, 49, 50 and 51 to apply with such modifications as the Secretary of State considers appropriate to take account of such determinations.
27ZAFloating offshore wind CFD unitsF1
This regulation applies where the relevant CFD unit is to be a floating offshore wind CFD unit.
A floating offshore wind CFD unit is an offshore wind CFD unit that satisfies the floating offshore wind conditions.
The applicant must demonstrate (in addition to the matter referred to in regulation 27(2)) that the relevant CFD unit is expected, by the target commissioning date, to satisfy the floating offshore wind conditions.
The floating offshore wind conditions are that—
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all turbines forming part of the relevant CFD unit—
are mounted on floating foundations; and
are situated in offshore waters of at least 45 metres depth (measured from the seabed to chart datum).
27ARemote island wind unitsF1
This regulation applies where the relevant CFD unit is to be a remote island wind CFD unit.
The applicant must demonstrate that the relevant CFD unit is expected, by the target commissioning date, to satisfy the remote island wind conditions.
The remote island wind conditions referred to in paragraph (2) are that—
the CFD unit generates electricity by the use of wind;
the CFD unit is located on a remote island;
the CFD unit is connected to the national transmission system for Great Britain or to a distribution system; and
either—
where the CFD unit is connected to the national transmission system for Great Britain, the generation circuit between the CFD unit and the main interconnected transmission system consists of not less than 50 kilometres of cabling, not less than 20 kilometres of which is subsea cabling; or
where the CFD unit is connected to a distribution system, the electrical connection between its grid supply point and the main interconnected transmission system consists of not less than 50 kilometres of cabling, not less than 20 kilometres of which is subsea cabling.
In this regulation—
“cabling” means a conductor used for the carrying of electricity;
“generation circuit” has the meaning given to that term in the NETS SQSS;
“grid supply point” has the meaning given to that term in the NETS SQSS;
“main interconnected transmission system” has the meaning given to that term in the NETS SQSS;
“NETS SQSS” means the means the National Electricity Transmission System Security and Quality of Supply Standard, version 2.3, February 2017 issued by National Grid Electricity Transmission plc (registered company number 2366977);
“remote island” means an island—
- (a)
located in offshore waters: and
- (b)
the entirety of the coastline (measured from the mean low water mark) of which is situated not less than 10 kilometres from mainland Great Britain; and
- (a)
“subsea cabling” means cabling which is laid on or under the sea bed.
27BStatements in relation to sustainable industry rewardsF1
If required by a contract allocation framework or a sustainable industry reward allocation framework, the applicant must provide a copy of a sustainable industry reward statement that applies to the relevant CFD unit in respect of the allocation round.
28ASustainable industry reward applicationF1
An eligible generator may make a sustainable industry reward application to the Secretary of State if required or permitted by a sustainable industry reward allocation framework.
The Secretary of State must not provide a sustainable industry reward statement in response to a sustainable industry reward application unless the Secretary of State is satisfied that—
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the F4sustainable industry reward application meets the minimum standards of likely contribution to the development and sustainability of supply chains, as set out in the sustainable industry reward allocation framework.
28BParticulars of sustainable industry reward applicationF1
A sustainable industry reward application must comply with the requirements set out in the sustainable industry reward allocation framework in relation to that round.
A sustainable industry reward applicant must—
identify any information included in, or in support of, a sustainable industry reward application or otherwise provided to the Secretary of State in relation to F3a generating station to support the development and sustainability of supply chains which the sustainable industry reward applicant considers is commercially confidential; and
where such information is identified, provide reasons why the sustainable industry reward applicant considers that the disclosure of that information (other than to the Secretary of State for the purposes of determining the sustainable industry reward application) may damage the commercial interests of the sustainable industry reward applicant or another person.
28CProviding sustainable industry reward statement or refusing applicationF1
The Secretary of State must, as soon as practicable after a sustainable industry reward application is received by the Secretary of State, give a notice to the sustainable industry reward applicant which includes—
a sustainable industry reward statement which—
confirms that the sustainable industry reward application meets the minimum standards of likely contribution to the development and sustainability of supply chains, as set out in the sustainable industry reward allocation framework;
states the allocation round for which the sustainable industry reward statement has effect; and
sets out the sustainable industry reward to which the sustainable industry reward applicant may be entitled and the obligations which must be fulfilled by that applicant in order to receive that reward; or
a refusal of the sustainable industry reward application and the reasons for that refusal.
28DConfidentiality: sustainable industry reward applicationsF1
The Secretary of State must not disclose any information included in, or in support of, a sustainable industry reward application or otherwise provided to the Secretary of State in relation to a generating station to support the development and sustainability of supply chains where that disclosure may, in the opinion of the Secretary of State, damage the commercial interests of any other person except—
with the consent of that person;
as required by or under an enactment or an order of the court; or
to a permitted person for a permitted purpose, and the Secretary of State is satisfied that arrangements have been made with that person to prevent any further disclosure of that information by that person.
In paragraph (1)—
“permitted person” means —
- (a)
a public authority to which the Human Rights Act 1998 applies; or
- (b)
a person providing services to the Secretary of State in relation to a permitted purpose or any officer, employee or agent of that person;
- (a)
“permitted purpose” means—
- (a)
to enable the Secretary of State to determine whether or not to provide a sustainable industry reward statement; or
- (b)
to support the development and sustainability of supply chains.
- (a)
28ERevision or withdrawal of sustainable industry reward statementF1
Paragraph (2) applies where the Secretary of State is satisfied that—
a sustainable industry reward statement contains an error;
the information included in, or in support of, a sustainable industry reward application was materially incorrect; or
a material change in circumstances relevant to the matters specified in the sustainable industry reward statement has occurred after that statement was given.
Where this paragraph applies, the Secretary of State—
may, subject to paragraph (3), revise the sustainable industry reward statement and, as soon as practicable after doing so, must give a notice to the sustainable industry reward applicant which includes the matters mentioned in regulation 28C(a); or
may withdraw a sustainable industry reward statement and, as soon as practicable after deciding to do so, must give a notice of the withdrawal to the sustainable industry reward applicant and the delivery body, together with the reasons for the withdrawal.
Where the Secretary of State revises a sustainable industry reward statement because the Secretary of State is satisfied as specified in paragraph (1)(c), the Secretary of State—
must not increase the amount of the sustainable industry reward to which the sustainable industry reward applicant may be entitled;
must not change in a material way the obligations which must be fulfilled by the sustainable industry reward applicant in order to receive a sustainable industry reward; and
must take into account the competitive nature of the sustainable industry reward allocation process.
42AUpdating the sustainable industry reward statementF1
This regulation applies where an applicant has a sustainable industry reward statement that applies to two or more CFD units, one or more of which is the subject of a CFD notification.
The Secretary of State must make any amendments to the sustainable industry reward statement that the Secretary of State considers are necessary to make clear how the statement applies in respect of each of the CFD units that is the subject of a CFD notification.
The Secretary of State must take account of any representations made by the applicant by the end of the period of 5 working days beginning with the notification date.
By the end of the period of 10 working days beginning with the notification date, the Secretary of State must give notice of any amendments made pursuant to paragraphs (2) and (3) to the applicant and the CFD counterparty.
In this regulation, “the notification date” means the date on which the Secretary of State receives notification from the delivery body that it has given its final CFD notification in relation to the allocation round.
57Directions under section 10 of the ActI1
A direction given by the Secretary of State under section 10(1) of the Act must—
be in writing and be dated;
specify a date by which the CFD counterparty to whom it is given must comply with the direction; and
specify the period for which the CFD counterparty must keep the offer of a contract on the specified terms open for acceptance, subject to regulation 59.
The date specified in accordance with paragraph (1)(b) must be no earlier than 20 working days from and including the date on which the direction is given.
58Obligation to notify the specified personI1
No later than 5 working days after the date on which a direction under section 10(1) of the Act is given, the Secretary of State must give a copy of the direction to each specified person.
Where a specified person is an unincorporated association, the Secretary of State must give a copy of the direction to each member of the unincorporated association.
59Directions ceasing to have effectI1
A direction given under section 10(1) of the Act ceases to have effect, if the specified person (or, if there is more than one specified person, any of them)—
rejects the offer to contract on the specified terms; or
does not accept the offer to contract on the specified terms before the expiry of the period specified pursuant to regulation 57(1)(c).
If a direction ceases to have effect in accordance with paragraph (1), the CFD counterparty must withdraw any offer of a contract that it has made in compliance with that direction.
60Publication of contractsI1
If a CFD counterparty offers a CFD in accordance with a direction given under section 10(1) of the Act and subsequently enters into that CFD, the CFD counterparty must publish that CFD, subject to paragraph (2).
The CFD counterparty must exclude any confidential information from the CFD that is published.
For the purposes of paragraph (2), “confidential information” means information—
which is identified in the specified terms as information to which paragraph (4) applies; and
in relation to which it is an initial term of the CFD that it must not be disclosed.
This paragraph applies to information if, in the opinion of the Secretary of State at the time the relevant direction is given, it is information—
which constitutes a trade secret;
the disclosure of which would or would be likely to prejudice the commercial interests of any person; or
the disclosure of which would constitute a breach of confidence actionable by any person.
Paragraph (4) does not apply to any strike price or reference price which may be included in the contract.
In this regulation—
“initial term” means a term of a CFD which is agreed at the time the CFD is first entered into;
“reference price” means F2the sum that may be specified in, or determined under, the CFD as the reference price in respect of electricity generated in the period specified in, or determined under, the contract;
“strike price” means F3the sum that may be specified in, or determined under, the CFD as the strike price in respect of electricity generated in the period specified in, or determined under, the contract.
61Interpretation of Part 10I1
In this Part—
-
“specified person” means a person specified in the direction as the person with whom the CFD counterparty must offer to contract;
-
“specified terms” means the contract terms specified in the direction.
Explanatory note
(This note is not part of the Regulations)
These Regulations are made further to the powers contained in Chapter 2 (contracts for difference) of Part 2 (electricity market reform) of the Energy Act 2013 (c. 32)(“the Act”). Parts 2 to 9 provide for the circumstances under which CFD notifications (defined in section 12(1) of the Act) may be given in respect of a contract for difference (defined in section 6(2) of the Act and referred to in Chapter 2 of Part 2 of the Act and these Regulations as a “CFD”). Part 10 provides for the circumstances in which the Secretary of State may direct a CFD counterparty (see section 7 of the Act) to offer to contract with a person in respect of a CFD. Except for Part 10, these Regulations do not extend to Northern Ireland.
Part 1
Regulation 2 contains definitions used in these Regulations. There are terms used in these Regulations which are defined in the Contracts for Difference (Definition of Eligible Generator) Regulations 2014, in particular the term “eligible generator”.
Part 2
Regulation 3 provides for notices under this Part to be made publicly available. Regulation 4 provides that by notice, the Secretary of State may establish an allocation round (defined in section 13(2)(b) of the Act) and provides for the content of the notice, including the period of an allocation round. The notice must also state the date by which applications for a CFD in the allocation round need to be given to the delivery body (defined in regulation 2 and the person responsible for administering applications for CFDs under these Regulations (other than under Part 10). By regulation 5, the Secretary of State may by notice vary the period of an allocation round or terminate a round before CFD notifications are made.
By regulation 6, the Secretary of State must ensure that an allocation framework (defined in section 13(2)(a) of the Act) applies to each allocation round. This regulation requires the Secretary of State to ensure that an allocation framework must set out the allocation process (defined in regulation 2) which applies to each type of application for a CFD which may be made in an allocation round and the method of calculation of the value of an application.
Regulation 7 requires the Secretary of State to identify in a notice the allocation framework which applies to an allocation round and provides for the persons to whom the notice must be given and when it must be given.
Regulation 8 provides that the Secretary of State may by notice amend or add to an allocation framework or may remove the application of a framework to an allocation round, so long as another allocation framework is applied unless the allocation round is terminated. This regulation provides for the persons to whom the notice must be given and when it must be given.
By regulation 9 provides that an allocation framework must be made publicly available and when publication must be made.
Part 3
Regulation 10 states that Part 3 applies where an allocation round has been established and requires that notices made under Part 3 must be made publicly available.
By regulation 11, the Secretary of State must by notice specify for the allocation round, the overall budget (defined in regulation 2 and which may be expressed in monetary terms or as an amount of capacity of electricity generation) and the administrative strike prices (defined in regulation 2) applicable to applications for CFDs. The notice may also specify budgets (“minima”) which are available only for certain types of applications and maximum budgets (“maxima”) which apply to descriptions of application specified in the notice. The notice may also specify a division of the overall budget (“a pot”) applicable to specified types of application. Where the overall budget is expressed in monetary terms but not at current prices, the notice must include a factor which adjusts the budget to current prices. This regulation provides for the notice to be given to the delivery body and when it must be given.
Regulation 12 provides that the Secretary of State may by notice amend or add to a notice made under regulation 11 and sets out restrictions on the amendments and additions which may be made. Regulation 13 provides for the notice to be given to the delivery body and when it must be given.
Part 4
Regulation 14 provides for the types of applications for CFDs which an eligible generator may not make under Part 4. The allocation framework for the allocation round may exclude additional types of application.
Regulation 15 provides that Chapters 2 to 4 of Part 4 apply where an allocation round has commenced further to a notice establishing the round.
Regulation 16 provides for the applications which may be made for CFDs and when applications may be withdrawn. Further provision concerning the withdrawal of applications in relation to an allocation round may be included in the allocation framework for that round.
By regulation 17, the delivery body must determine which applications qualify to take part in the allocation process for the allocation round. An application which does so qualify is a “qualifying application”. This regulation provides for the matters on which the delivery body must be satisfied in order to determine an application as a qualifying application, including that the general qualification requirements (see Chapter 3 of Part 4, regulations 23 to 25) and the additional qualification requirements (see Chapter 4 of Part 4, regulations 26 to 28) have been met. This regulation also provides for the information which must be provided with an application, including information which needs to be included in a CFD notification, which set of standard terms (the terms and conditions applicable to CFDs) applies in respect of the application and whether or not a modification agreement (defined in section 15(2) of the Act) applies to the relevant standard terms.
Regulation 18 gives a power to the delivery body to require the Authority (defined in section 152(1) of the Act as the Gas and Electricity Markets Authority, more commonly referred to as “Ofgem”) to provide the delivery body with information in relation to the accreditation (defined in regulation 2) of generating stations which are the subject of applications for CFDs.
Regulation 19 requires the delivery body by notice to inform an applicant whether or not the applicant is a qualifying applicant in relation to an application that person has made. Where the applicant is not a qualifying applicant, the delivery body makes a “non-qualification determination”. This regulation provides for when a notice must be given and that in respect of an allocation round, the allocation framework for that round may vary the time to give a notice.
By regulation 20, an applicant who is given a non-qualification determination may request the delivery body to review that determination. This regulation sets out by when such a request needs to be made and the information which must be contained with such a request. This regulation also requires the delivery body by notice to inform the applicant whether or not a non-qualification determination is upheld and provides for when such notice must be given. In respect of an allocation round, the allocation framework for that round may vary the time limits in this regulation.
Regulation 21 contains provisions which prevent more than one application being made in respect of the same generating station.
Regulation 22 makes provision concerning the form in which applications must be made, the information required to be provided with applications (see Schedule 1) and by when applications must be made. The delivery body must give a notice to each applicant stating the date of receipt of that person’s application.
Regulation 23 requires applicants to provide copies of planning consents which are relevant to the application. In respect of an allocation round, the allocation framework for that round may vary the requirements in this regulation. Regulation 24 lists the planning consents which may apply to applications.
Regulation 25 requires applicants to provide copies of those agreements which enable a connection to be made to the national transmission system for Great Britain or the distribution system (transmission system and distribution system are defined in section 4(4) of the Electricity Act 1989 (c. 29). In respect of an allocation round, the allocation framework for that round may vary the requirements in this regulation.
Regulation 26 provides that for an application in respect of generating station with a capacity of electricity generation of 300 megawatts or more, the applicant may be required to provide with the application a statement from the Secretary of State under regulation 12 of the Electricity Market Reform (General) Regulations 2014 in relation to supply chains referred to in that regulation.
Regulation 27 provides for requirements which apply in relation to offshore generating stations (defined in regulation 2).
By regulation 28, in respect of an allocation round, the allocation framework for that round may provide for additional requirements which an applicant may need to satisfy.
Part 5
Regulation 29 requires that the delivery body makes valuations in respect of applications and provides how those valuations are to be determined by reference to matters in the allocation framework for the allocation round. This regulation requires that the valuations, and such other information in relation to the valuations as set out in the allocation framework, must be made available to the Secretary of State.
Regulation 30 provides for the matters which an allocation process must achieve, including not exceeding the overall budget for the allocation round, how any minima and maxima set for the round are to be applied and when a competitive process is to be applied to determine which qualifying applications are those in respect of which a CFD notification is to be made (“successful applications”).
Regulation 31 provides for dates as listed in the regulation to be set out in the allocation framework for the allocation round. Those dates are applied in regulation 32.
Regulation 32 provides for notices to be given by the delivery body to the Secretary of State which set out how many (if any) requests for a review of a non-qualification determination have been made and for notices by the Authority to the Secretary of State setting out how many (if any) appeals against non-qualification determinations (“qualification appeals”) have been made and the progress made in determining those appeals.
Regulation 33 provides when an allocation process may be commenced by the delivery body, including when the process must not be commenced by reason of outstanding qualification appeals of which notice is given under regulation 32 and when the Secretary of State may direct that the allocation process commences.
By regulation 34, where commencement of the allocation process is delayed by more than 5 months after the application closing date (defined in regulation 2), the Secretary of State may give a notice to the delivery body to require it to allow applicants to revise the target dates made with their applications and, where provided, to substitute those dates in the allocation process.
Regulation 35 provides that the delivery body must inform the Secretary of State and the CFD counterparty when it has completed the allocation process for the allocation round.
Regulation 36 provides for the delivery body to obtain an independent audit of calculations made during an allocation process and for a report to be provided. Where an allocation process included bids of strike prices, restrictions are imposed in respect of information about those bids being included in the report. This regulation also provides for publication of the audit report and exclusion from publication of information which is commercially confidential.
Regulation 37 requires the delivery body to provide the audit report to the Secretary of State and to give notice to the Secretary of State stating whether the delivery body intends to proceed to give CFD notifications or to re-run the allocation process or part of it.
By regulation 38, the Secretary of State may direct an allocation process to be re-run or direct the allocation round to be halted or to proceed, and that a notice must be given to terminate the allocation round if the round is halted.
Regulation 39 requires the delivery body to comply with a direction given under regulation 38.
Regulations 38 and 39 are subject to regulation 40 which provides that where a delay period has expired (being a period of more than 5 months since the application closing date or such other period for the allocation round as set out in the allocation framework), the allocation process must be re-run.
Part 6
Regulation 41 provides that Part 6 applies where, further to Part 5, the allocation round is to proceed.
Regulation 42 requires the delivery body to give CFD notifications in respect of those applications which were successful in the allocation process and to inform those applicants whose applications were not successful of that fact.
Part 7
Regulation 43 provides for appeals against non-qualification determinations to the Authority. Regulation 44 sets out the requirements for such appeals.
By regulation 45, the delivery body must be informed of an appeal and may provide a reply to the appeal. Regulation 46 provides for the determinations which may be made by the Authority and to whom notice of the determination must be given and by when.
Regulation 47 provides for appeals to the High Court or Court of Session by an applicant against determinations of the Authority.
Regulation 48 provides for a register to be established and maintained by the delivery body in relation to appeals.
Part 8
Regulation 49 provides for the application of Part 8 where an applicant has made an appeal to the Authority in respect of an application (“a pending application”) and that appeal is not determined when an allocation process commences.
By regulation 50, where the allocation framework for the allocation round provides for bids of strike prices, and such bids are made in the allocation process in respect of applications equivalent to the pending application, the applicant may in respect of the pending application also make such bids. Further provision is made concerning when the delivery body can become aware of the content of such bids and when it must destroy them.
Regulation 51 provides that where a pending application is determined by the Authority as a qualifying application after an allocation process has completed but is to be re-run, the pending application must be included in the re-run process. Where Part 6 of these Regulations applies after a pending application is determined by the Authority as a qualifying application, the delivery body must determine whether or not the pending application would have been a successful application and, if so, the final strike price applicable to the application. This regulation also provides for when an applicant in respect of a pending application may substitute target dates for those given in the application and when bids made by an applicant in respect of a pending application are to be taken into account in determining whether or not the application is a successful application. Where a pending application is a successful application, a CFD notification must be given in respect of that application.
Regulation 52 provides for the remedies which the High Court or the Court of Session may apply where an appeal is made on a point of law from the Authority to the court and that appeal is upheld.
Regulation 53 provides for notices to an applicant where under Part 8 a pending application is not found to be a qualifying application or a successful application.
Part 9
Regulation 54 requires the delivery body to make available to the Secretary of State the information referred to in the regulation in respect of an allocation round.
Regulation 55 provides for enforcement by the Authority in respect of the requirements imposed on the delivery body under these Regulations. Regulation 56 provides for the form of and the giving of documents under these Regulations, except in respect of Part 10.
Part 10
Part 10 applies where the Secretary of State makes a direction under section 10(1) of the Act, requiring the CFD counterparty to whom a direction is given to offer to contract with a person specified in the direction, on terms specified in the direction.
Regulation 57 sets out requirements as to the form and content of such a direction. Regulation 58 provides that a copy of the direction must be given to the person with whom the CFD counterparty has been directed to contract.
Regulation 59 makes provision about the circumstances in which a direction may cease to have effect, and the requirement for an offer made in compliance with that direction to be withdrawn.
Regulation 60 provides for the publication of contracts by a CFD counterparty. In a direction made under section 10(1) of the Act, the Secretary of State may specify contract terms which identify particular information and require it not to be disclosed. A CFD counterparty must remove such information from a contract before publishing it in accordance with this regulation.
Regulation 61 includes definitions only applicable to Part 10.
Schedule 1
This schedule lists the information which applicants must provide in support of their applications. Additional information may be required in an allocation round if provided in the allocation framework for that round.
Schedule 2
This schedule provides that documents mentioned in these Regulations must be in writing and dated and provides for the methods by which a person may give a document to another person.
A full impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available from the Department of Energy and Climate Change at 3 Whitehall Place, London, SW1A 2AW and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.