On 26 January 2024, LCCC issued a Stakeholder Bulletin to confirm an in-period adjustment to the Interim Levy Rate from £4.540/MWh to £10.748/MWh effective from 25 February 2024 to 31 March 2024.
Suppliers will receive a formal notice to confirm this in-period adjustment. Suppliers are required to maintain their Credit Cover requirement using the ILR applicable for the Quarterly Obligation Period. If a Supplier is required to lodge additional Credit Cover, please ensure you have sufficient Credit Cover lodged by 5:00pm on 23 February 2024.
Within the Stakeholder Bulletin, LCCC have provided further details as to why this in-period adjustment was required. We have included a summary of this further down.
We have updated the Key Payment Figures for 2023/24 to reflect this change and you can locate this document on the Settlement Data for Suppliers webpage.
Why was an in-period adjustment to the Interim Levy Rate required?
LCCC noted the high volatility of power market prices. This includes recent, sharp, market price drops. Due to this, their consideration outcome was that, with the ILR rate set at £4.540/MWh, this would result in insufficient money to cover payments to generators under the CfD scheme.
They determined an ILR of £10.748/MWh and no change to the TRA would ensure enough money would be collected to pay CfD generators.
For further detail on LCCC’s calculations, please refer to the CfD Levy Dashboards.
To help Suppliers we have provided the following useful Frequently Asked Questions (FAQs).
What is the process for lodging Credit Cover or additional Credit Cover?
WP42 – Supplier CfD Credit Cover provides details on the process for lodging Credit Cover including the Letter of Credit templates (p21-25) and the approved bank account details for cash Credit Cover (p6).
In order for Credit Cover to be considered;
- Cash amount must have been received in the relevant bank account;
- Valid Letter of Credit received electronically; and
- Received by 5:00pm on 23 February 2024
PLEASE NOTE: The bank account details and Letter of Credit templates are different to those used for CM Credit Cover.
How do I calculate my CfD Credit Cover?
The minimum Credit Cover requirement is a Supplier’s metered volumes for 21 days reference period multiplied by the Interim Levy Rate.
To help, we will first calculate your Credit Cover amount on 26 February 2024 and this will use the reference period as follows:
- 26 January 2024 to 15 February 2024
G5 – Supplier CfD Credit Cover provides further details and an example to illustrate how to calculate your Credit Cover.
What is my current CfD Credit Cover balance?
You can locate your CfD Credit Cover balance in the latest Daily Credit Cover Report sent to your company email and also available to download on My EMRS.
Please see item J2022 (Column H) on the report which reflects the Total Credit Cover held (combination of cash and LoC value) as of the day. Items names and further details are available within the Data Transfer Catalogue (DTC).
Where can I locate more information on CfD Credit Cover?
What are the key dates I need to be aware of?
The table below shows the key dates as following for this in-period adjustment.
|23 February 2024
|Suppliers ensure sufficient Credit Cover lodged for ILR of £10.748/MWh
|25 February 2024
|ILR of £10.748/MWh applies
|26 February 2024
|Suppliers invoiced for the first ILR payment based on £10.748/MWh