The government-appointed EMR Settlement company said in a note to UK energy suppliers, seen by Utility Week, that there is “a high probability” it will need to resort to manual invoicing to claim the statutory Operational Costs Levy needed to fund the running of the CfD counterparty.
The delivery body was expected to enable an automated system for suppliers to pay in a rate of £0.0397 per megawatt hour of electricity from 29 April, but has acknowledged that delays to its system testing means contingency measures may be needed.
EMR Settlement said it will use one of the existing Elexon solutions called ‘LuSTRe’ to calaculate the operational cost payments owed, and will email this to each supplier with associated backing data.
“Whilst direct debit isn’t currently available we’d like to highlight to suppliers that they can make a lump sum payment up front to cover an estimated period of daily invoices,” EMR Settlement said.
“For example, paying an amount that provides a reasonable buffer over and above their estimated monthly CfD Operational Costs payments, rather than paying each daily invoice by its due date,” the delivery body added.
The Operational Costs Levy differs from the levy used to pay generators for the low carbon power they produce.
Under the Government’s CfD regime, low carbon generators will hold a contract with the counterparty, the so-called Low Carbon Contracts Company (LCCC), through which it will either receive payments topping up its revenue stream to an agreed strike price or pay back any revenue made in excess of the strike price.
While the generator revenue will be levied from consumer bills via the Supplier Obligation, the running costs of the LCCC will be paid for through the Operational Costs Levy.
EMR Settlement said full end-to-end testing of the contingency measures is being undertaken, and has asked for supplier feedback by midday Monday 20 April.