CfD scheme to return money to electricity suppliers for the first time

Around £39 million is to be returned in the first quarter of 2022

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For the first time ever electricity suppliers will receive more than £39.2 million through the Contracts for Difference scheme (CfD).

Under the CfD scheme, generators normally receive top-up payments to the strike price they are paid for the electricity they generate.

They can also pay money back when market prices rise beyond their strike price.

The Low Carbon Contracts Company (LCCC) said the high wholesale prices that dominated the latter half of last year made it reduce the CfD interim levy rate (IRL) to £0/MWh in September, the first time this had ever happened.

Due to the fact that energy prices remain at record high levels, the ILR has also been set at £0/MWh for the current quarter.

The LCCC predicted that another payment to suppliers will be made in the next quarter.

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