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DECC Launches CfD Exemption Consultation

contracts for differencesContracts for Difference have already proved controversial.

Whether it was the awarding of the first round of funding under
the scheme to offshore rather than onshore wind, the legal battle between DECC and Drax Energy to secure subsidy or the failure for energy suppliers to agree a uniform application of the levy on their energy prices, the scheme’s implementation has been far from smooth.

To understand how your supplier treats CfD costs visit our handy CfDs guide however be warned, some suppliers are yet to make their minds up on how costs will be recovered which means uncertainty and an inability to validate a true price comparison without expert help.

Now though DECC has announced a consultation on the application of CFDs for Energy Intensive Users.

DECC’s consultation will focus on the process for energy-intensive industries to be exempted from the cost of CfDs.

This may be good news for the competitiveness of our most energy intensive industries on a worldwide scale, particularly when competitors operate under regimes that have shown less diligence over climate change matters and therefore place less cost burdens on their leading businesses.

For smaller business and households however the news is less good. If approved, any exemption would mean an increased share of costs being borne by non-energy intensive customers. Inevitably that will mean higher bills. Higher than already anticipated.

Whilst the 34-page consultation document is heavy on acronym, the impact of such a change is conspicuous by its absence.

The latest CfD controversy is likely to be the most expensive yet.

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