On 29 March 2021, Low Carbon Contracts Company (LCCC) announced it has adjusted the Total Reserve Amount (TRA) and the Interim Levy Rate (ILR) for Quarterly Obligation Period 1 April 2021 to 30 June 2021 are as follows:
- Total Reserve Amount is adjusted to £94,244,590.77 from £114,980,072.12
- Interim Levy Rate is adjusted to £9.954/MWh from £11.269/MWh
LCCC communicated this information via the Stakeholder Bulletin and this provides further details why the TRA and ILR have been adjusted. To view LCCC’s calculations, please visit the CfD Levy Dashboards. For background information here is the Stakeholder Bulletin that confirmed the ILR for 1 April 2021 to 30 June 2021 and confirms the reasons for the increase in the ILR and the repayment of the BEIS loan to cover the part of the shortfall incurred last year due to the COVID-19 pandemic.
How does this affect my Interim Rate payments and Reserve Payment requirements?
As the Quarterly Obligation Period 1 April 2021 to 30 June 21 has not yet commenced. Suppliers will be notified of their adjusted proportion of the TRA and this will be invoiced via the Quarterly Reconciliation issued on 13 April 2021.
Reminder: Do you have sufficient Credit Cover lodge?
Please ensure you have sufficient Credit Cover lodged by 5pm on 31 March 2021 to meet the increase in the Interim Levy Rate. The relevant reference period is 3 March 2021 to 23 March 2021 that will be used to calculate your Credit Cover amount for the 1 April 2021.
How is my Credit Cover requirement calculated?
The minimum Credit Cover requirement is a Supplier’s metered volumes for a 21 day reference period multiplied by the Interim Levy Rate. G5 – Supplier CfD Credit Cover provides information on how to calculate your Credit Cover, the daily Credit Cover report and what happens if a Supplier doesn’t lodge sufficient Credit Cover.
What is my current CfD Credit Cover balance?
The CfD Credit Cover balance can be found in the latest Daily Credit Cover Report sent to your company email. 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).
What is the process for lodging 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 5pm on 31 March 2021.
PLEASE NOTE: The bank account details and Letter of Credit templates are different to those used for CM Credit Cover.
What are the key dates I need to be aware of?
The table below shows the key dates for the 1 April 2021 to 30 June 2021 Quarterly Obligation Period.
|31 March 2021||Suppliers to ensure their Credit Cover lodged is sufficient for ILR of £9.954/MWh from the 1 April 2021 to 30 June 2021|
|1 April 2021||ILR of £9.954/MWh applies for 1 April 2021 to 30 June 2021|
|14 April 2021||Suppliers to be invoiced for the first Interim Rate payment based on £9.954/MWh applies for 1 April 2021 to 30 June 2021|
EMRS Settlement Calendar will provide the dates for when invoices will be generated and when payments are due. Key Payment Figures will provide details of the ILR and the TRA for the Quarterly Obligation Periods. These are both available on the Settlement Data webpage on the EMRS website.
What are my requirements against Interim Rate payments and Credit Cover?
Suppliers must make Interim Rate payments and provide Credit Cover if they supply electricity within the Quarterly Obligation Period. Suppliers are required to maintain their Credit Cover requirement using the ILR applicable for the Quarterly Obligation Period. If Suppliers need to lodge additional Credit Cover the process is detailed in WP42 – Supplier CFD Credit Cover and G5 – Supplier CFD Credit Cover.
Where can I locate information on how my Reserve Payment is calculated?
G3 – CfD Reserve Payment provides information on how the Reserve Payments are calculated.