The Contracts for Difference Feed-in-Tariff is a scheme to help the UK meet its net zero targets and ensure an interrupted supply of electricity feeds into the network.
It has replaced the Renewables Obligation as a reward to suppliers who generate low-carbon electricity.
Renewable generators are awarded contracts where a strike price is agreed. If the strike price is less than the wholesale price then a top-up payment is made. If the market price is higher than the “strike price”, suppliers receive a payment
CfD costs will vary annually due to wholesale price fluctuations and the amount of CfD generation produced each year. They are met by a levy applied to energy suppliers, which are then passed on to their customers, as a Third-Party Cost..
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