Explanatory note

These Regulations amend the Contracts for Difference (Allocation) Regulations 2014 (S.I. 2014/2011) (“Allocation Regulations”), the Electricity Market Reform (General) Regulations 2014 (S.I. 2014/2013) (“EMR Regulations”) and the Contracts for Difference (Standard Terms) Regulations (S.I. 2014/2012) (“Standard Terms Regulations”). Those Regulations form part of the legislative framework underpinning the Contracts for Difference (“CFD”) scheme under section 6 of the Energy Act 2013 (c. 32).

Part 2 amends the Allocation Regulations. Regulations 4 and 6 to 8 reduce the time required to open the application window and permit a sustainable industry reward round to be opened by the Secretary of State before 31st December 2028. Regulation 9 allows the Secretary of State to set a sub-budget which can be flexible and include minima and maxima. Regulations 11 to 14 enable the Secretary of State to specify which technologies must, or are permitted to, apply for a sustainable industry reward statement, and the requirements an applicant must meet. Regulation 15 makes provision for the delivery body to issue CfD notices to those specified and to inform the Secretary of State when it gives the final CfD notification for an allocation round. Regulation 16 requires the Secretary of State to update a sustainable industry reward statement which applies to two or more CfD units, one or more of which is the subject of a CfD notification.

Part 3 amends the EMR Regulations. Regulations 18 and 19 provide that a sustainable industry reward implementation statement cannot be awarded by the Secretary of State unless the financial minimum standards have been met. Regulation 22 provides that the Secretary of State may deem an applicant has fulfilled the financial minimum standards where they have been unable to fulfil those financial minimum standards due to unforeseeable events or circumstances.

Part 4 amends the Standard Terms Regulations. Regulation 24 inserts a definition of “sustainable industry reward statement”. Regulation 26 requires the CFD counterparty to apply or complete the standard terms in accordance with any updated sustainable industry reward statement. Regulation 27 requires the CFD counterparty to make an offer of a CFD within the time frame specified.

A full impact assessment of the effect that this instrument will have on the costs of the business, voluntary and public sector is available from the Department for Energy, Security and Net Zero, 3-8 Whitehall Place, London, SW1A 2HH, and is available alongside this instrument on www.legislation.gov.uk.