On 17 August 2021, LCCC issued a Stakeholder Bulletin to announce an in period adjustment to the Interim Levy Rate (ILR) to £1.791/MWh from £6.373/MWh. This is effective from 18 August 2021 to 30 September 2021, the end of the current quarterly obligation period. We have issued notices to notify Suppliers of this change. There is no change to the Total Reserve Amount.
Why has the Interim Levy Rate been adjusted?
Since the start of Q3 2021, Low Carbon Contracts Company (LCCC) has been building a surplus of income over payments, caused by a combination of lower expected generator payments and higher power prices. As a result, LCCC has decided to reduce the Interim Levy Rate (ILR) to £1.791/MWh.
The CfD Levy Dashboards published by LCCC has been updated to reflect this adjustment. The Interim Levy Rate and Total Reserve Amount illustrates the calculations performed by the Supplier Obligation Forecasting Model (“SOFM”). The In Period Tracking compares the forecast against the realized values for the current Quarterly Obligation Period and provides an estimate of the reconciliation payment to be made to electricity Suppliers.
How does this affect my Credit Cover requirement?
From 18 August 2021, Suppliers will be required to maintain Credit Cover using the adjusted ILR of £1.791/MWh. Suppliers will be able to request any excess lodged cash Credit Cover or reduce the value of the Letter of Credit if applicable. Further information on the process for returning Credit Cover is available in WP42 – Supplier CfD Credit Cover.