Questions remain over Contracts for Difference

Last week’s draft energy bill has possibly left the business sector more questions than answers. The ‘Contracts for Difference’ (CfD), one of the key policies of electricity market reform, has […]

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By Tom Gibson

Last week’s draft energy bill has possibly left the business sector more questions than answers. The ‘Contracts for Difference’ (CfD), one of the key policies of electricity market reform, has been the most heavily targeted as business says Government is still keeping quiet over the detail.

Rhian Kelly, Director for Business Environment at the CBI told ELN the reforms would struggle to stimulate investment: “If you’re going to have a contract, who is it with? If it doesn’t work, who do you sue? Until we get more evidence and more information about those decisions it’s going to be tricky for the business community to make the decisions to invest.”

The CfD is an investment mechanism which DECC says will offer industry a long term price plan, giving certainty to those holding a company’s purse strings.

However DECC has said this revenue support, or strike price, won’t be published until 2013, leaving many in the sector in the dark.

Jeremy Nicholson, Director at the Energy Intensive Users Group told ELN: “Without information on that investors can’t really make decisions to go ahead and the consumers can’t easily understand what the impacts are going to be on their bills.”