Commentary on Sections Part 2: Electricity Market Reform Chapter 2: Contracts for difference Section 10: Direction to offer to contract
99.Section 10 confers a power on the Secretary of State to issue a direction to the CFD counterparty to offer a CFD to eligible generators in accordance with provisions set out in regulations. It is expected that most CFDs will be allocated to eligible generators by the national system operator, National Grid, in accordance with section 12 and any provision made using the power in section 12. However, where flexibility is needed to vary the terms for particular projects beyond what is permitted by the modification of standard terms process (section 15), the Secretary of State will allocate CFDs using the power conferred under section 10.
100.A contract will only come into being on the agreement of a generator to whom an offer is made by the CFD counterparty.
101.Subsection (3) requires that regulations define an “eligible generator” for CFD purposes.
102.Subsections (6) to (8) provide that any direction which relates to generating stations in Northern Ireland may not be made without consent of the Department of Enterprise, Trade and Investment. This will enable Northern Ireland Ministers to play a role in being satisfied that the terms to be offered to generators in Northern Ireland are suitable.