CFDs provide long-term price stabilisation to low carbon plant, allowing investment to come forward at a lower cost of capital and therefore at a lower cost to consumers.
CFDs require generators to sell energy into the market as usual but, to reduce exposure to fluctuating electricity prices and provide a variable top-up from the market price to a pre-agreed ‘strike price’.
At times when the market price exceeds the strike price, the generator is required to pay back the difference, thus protecting consumers from over-payment.
These documents set out the various stages of development and the final standard terms and conditions of the CFD.
An update to the contract was published in draft on 8 February 2017.