The Contracts for Difference (Standard Terms) Regulations 2014
| Jurisdiction | UK Non-devolved |
| Citation | SI 2014/2012 |
| Year | 2014 |
2014No. 2012
ELECTRICITY
The Contracts for Difference (Standard Terms) Regulations 2014
31stJuly2014
The Secretary of State has before making these Regulations-
(a) consulted the persons listed in section 24(1)(a) to (g) of the Energy Act 2013( 1) and such other persons as the Secretary of State considered it appropriate to consult; and(b) had regard to the matters in section 5(2) of that Act.In accordance with section 6(8) of that Act, a draft of this instrument was laid before Parliament and approved by a resolution of each House of Parliament.
Accordingly the Secretary of State, in exercise of the powers conferred by sections 6(1), 11(3), 14, 15(2) and (4), 16(b) and 19(1) and (2) of the Energy Act 2013, makes the following Regulations:
PART 1
Introduction
Citation and commencement
1. These Regulations may be cited as the Contracts for Difference (Standard Terms) Regulations 2014 and come into force on the day after the day on which they are made.
Interpretation
2. In these Regulations-
"the Act" means the Energy Act 2013;
"allocation round notice" has the meaning given in regulation 5(1);
"applicant" means a person to whom section 15(1) of the Act applies;
"the CFD counterparty" means the person or persons designated as a counterparty for contracts for difference in accordance with section 7 of the Act;
"delivery body" means-
(a) the national system operator; or(b) if the national system operator's functions under Chapter 2 of Part 2 of the Act have been transferred to an alternative delivery body, that body;"eligible generator" has the meaning given by the Contracts for Difference (Definition of Eligible Generator) Regulations 2014( 2);
"generating facility" means the facility which produces low carbon electricity generation for the purposes of a CFD;
"generator" means a person who enters into a CFD with the CFD counterparty;
"reference price", in relation to a CFD, means a price determined under the CFD which is intended to represent a market price of electricity in respect of a period specified in that CFD;
"strike price", in relation to a CFD, means a price specified in or determined under the CFD which is compared to the reference price determined under that CFD so as to enable the determination of the amount (if any) which is payable by the CFD counterparty or a generator under the CFD in respect of the generation of electricity by that generator;
"third party" means a person other than a generator who enters into a contract with the CFD counterparty which is not a CFD; and
"working day" means 9 am to 5 pm on Mondays to Fridays excluding-
(a) bank holidays within the meaning of section 1 of the Banking and Financial Dealings Act 1971( 3), including those bank holidays in part only of the United Kingdom;(b) Good Friday; and(c) when it falls on a day that would otherwise be a working day, Christmas Day.PART 2
Standard terms
Provision to be included in standard terms
3. The standard terms issued under section 11(1) of the Act or revised under section 11(2) of the Act must set out-
(a) that where a strike price is higher than a reference price, the CFD counterparty must pay the generator the difference between the strike price and the reference price;(b) that where a reference price is higher than a strike price, the generator must pay the CFD counterparty the difference between the reference price and the strike price;(c) that the amount payable under paragraph (a) or (b) must be calculated by reference to the amount of low carbon electricity generation produced by a generating facility;(d) the way in which a reference price is to be determined;(e) the way in which a strike price is to be adjusted according to inflation;(f) the way in which the amount of low carbon electricity generation produced by a generating facility is to be determined;(g) that sums must not be paid by the CFD counterparty under a CFD where those sums are not allocated to that CFD in accordance with the Contracts for Difference (Supplier Obligation) Regulations 2014( 4);(h) which circumstances allow a generator to reduce the capacity of its generating facility;(i) which changes in law will cause compensation to be payable by one party to the other party or cause a change to a strike price;(j) the way in which the amount of compensation payable or a change to a strike price under paragraph (i) is to be determined;(k) which time limits in a CFD may be extended where force majeure prevents a party from complying with them;(l) which circumstances require a generator to receive the consent of the CFD counterparty before transferring a CFD or assigning its rights and obligations under a CFD;(m) the way in which the parties to a CFD may amend a CFD;(n) a mechanism by which disputes between the parties to a CFD are to be resolved;(o) which circumstances allow the CFD counterparty to terminate a CFD;(p) which circumstances require a generator to make a payment to the CFD counterparty following termination of a CFD; and(q) the way in which the amount payable under paragraph (p) is to be determined.Provision and publication of information
4. (1) Where the Secretary of State publishes revised standard terms in compliance with section 11(5) of the Act, the Secretary of State must also publish an explanation of why the revisions have been made.
(2) Before...
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