In period adjustment to Interim Levy Rate from 18 February 2021 to 31 March 2021Posted on:
Low Carbon Contract Company (LCCC) has adjusted the Interim Levy Rate (ILR) to £6.273/MWh from £8.283/MWh. This is effective from 18 February 2021 until 31 March 2021, the end of the current quarterly obligation period. On behalf of LCCC, EMRS has issued an In Period Adjustment Interim Levy Rate Notice to Suppliers.
Why has the Interim Levy Rate been adjusted?
The reason for adjusting the ILR is that since the start of 2021, LCCC have been building a surplus of income over payments, caused by a combination of lower CfD Generator payments and slightly higher demand. The former is predominantly a consequence of higher market prices at the beginning of the quarter, while the latter was driven by the low temperatures. As a result, LCCC has decided to reduce the ILR. The CfD Levy Dashboard published by LCCC has been updated to reflect this adjustment. There is no change to the Total Reserve Amount.
How does this affect my Interim Rate payments?
The first invoice using the reduced adjusted ILR will be sent out on 1 March 2021. Previous Settlement Dates will continue to be reconciled at the original Interim Levy Rate and through the Quarterly Reconciliations.
How does this affect my Credit Cover requirement?
From 18 February 2021, Suppliers will be required to maintain Credit Cover using the adjusted ILR of £6.273/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.