Instead of having an exercise price, ODA would consist of two payments. The most important would be an availability payment linked to compliance with performance requirements and determined either by negotiations or by calls for tenders. A smaller element would vary depending on the difference in cost between operating with carbon capture and operating an undiminished reference plant. The proposed amendment would ensure that the Regulation allows all forms of CO2 transport. The Department has submitted three amendments to the rules underlying the funding system. Only an eligible generator can be granted a CfD. The Contracts for Difference (Definition of Eligible Producer) Regulations, 2014 (the “Eligibility Regulations”) define who is a licensed producer. Proposed amendment to allow for the modernization of carbon capture and storage projects eligible for a Contract for Difference. The purpose of this consultation will be to gather views on the government`s proposal to amend the Contracts for Difference (Definition of Eligible Generator) Regulations to clarify that carbon capture and storage (CCS) rehabilitation projects involving the connection of an existing power plant to a complete CCS system are eligible for a Contract for Difference (CFD). The proposed amendment would ensure that the existing CCS policy is correctly and explicitly reflected in the CFD legislation. The CCUS “will be crucial to achieving the UK`s net-zero 2050 target, playing a crucial role in balancing the economy, supporting the low-carbon economic transformation of our industrial regions and creating new quality jobs,” says the Department for Business, Energy and Industry`s strategy paper. It is part of the ongoing work to define market rules for the emerging sector, which is increasingly attracting the attention of major energy companies. When the application window for the CfD request is closed, the determination of the application begins.
The delivery office then decides whether or not an application is eligible for the award process. Following the withdrawal of capital support for the CCS competition during the November 2015 expenditure review, the proposals submitted as part of this consultation were not necessary as the draft competitions indicated that they could no longer be continued. Failure to comply with any of the qualification criteria and additional information requirements will result in the rejection of the request by the delivery agent. It should be noted that the subsequent review and appeal phases for unqualified applicants do not allow for the presentation of additional evidence that was not submitted with the original application. This consultation took place from 4 November 2015 to 2 December 2015, 23:45 The first concerns the Dispatchable Power Agreement (DPA), which is based on the standard terms of a CfD. It describes the agreements as “a key tool to promote low-carbon electricity generation by stimulating investment in energy CCS projects and encouraging the operation of these plants in a way that benefits the UK energy market”. The last part concerns the amendments to the rules on the transport of CO2. The Contracts for Difference (Definition of Eligible Generators) Regulations, 2014 state that generators must be connected to a “complete” system that assumes that the exhaust gases would be diverted. “However, we are aware that producers may need to use a transport solution outside the pipeline, including rail, road and/or sea transport, to transport their CO2 to an appropriate storage location. This could be necessary for various future scenarios, for example for projects that are not directly located in a CCUS cluster and cannot connect to the CO2 pipeline of the CCUS cluster,” the document says. To apply for a CfD, applicants must complete the CfD application form, which will be available just before the start of the allocation cycle. The proposed amendment to the Contracts for Difference (Allocation) Regulations, 2014 would remove the general requirement that CFDs have an exercise price.
Another change would ensure that this does not affect CFDs for other low-carbon energy sources, namely renewables, nuclear power and energy produced from waste. The service entity shall determine the qualification on the basis of the information provided by the applicant and in accordance with the requirements of the Eligibility Regulation, the Allocation Rules and the Allocation Framework. The allocation framework shall contain a list of the checks to be carried out by the notification body when assessing applications. .
