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There are two types of Contracts for Difference (CFD), one relevant to investments and one that is a new levy on UK business electricity customers, envisaged as a replacement for the current Renewables Obligation (RO).
In fact, the two are closely related: in business electricity, a Contract for Difference (CFD) is a contract between a low carbon electricity generator and the Low Carbon Contracts Company (LCCC), a Government-owned company.
As the Government explains, the business electricity generator in a CFD is paid the difference between the ‘strike price’ – a price for business electricity reflecting the cost of investing in a particular low carbon technology – and the ‘reference price’– a measure of the market average business electricity price.
Contracts for Difference (CFD) are designed, in the Government’s words, to promote “greener energy and reliable supplies that the country needs, at the lowest possible cost”. The aim is for low-carbon generation to be able to compete with conventional, fossil-fuel generation.
The CFD system offers business electricity suppliers more certainty by reducing their exposure to volatile wholesale prices. UK companies are somewhat protected from higher support costs when business electricity prices are high.
Business electricity Contracts for Difference (CFD) came into force in April 2015. But the Renewables Obligation (RO) will still be in place until 2037 as the scheme’s 20 year lifespan phases out. CFDs will to replace the RO for any new business electricity generation plant from 2017.
Business electricity Contracts for Difference (CFD) will initially be administered as an additional cost on business electricity bills. But, with the phasing out of the Renewables Obligation (RO) offering an uncertain timetable, businesses may wish to take expert advice on how they can best comply with Contracts for Difference (CFD) rules.
Business electricity suppliers will have varying responses to the Contracts for Difference (CFD) rules and making the necessary business electricity comparison could be time consuming. We offer no-obligation comparisons in just 20 minutes and can take care of all the paperwork for your business electricity switch service if you like the sound of what we offer.
Thousands have already chosen SwitchMyBusiness.com – we are the highest rated business energy provider on independent ratings site TrustPilot – so give us a call on 0330 0100 251 (or request a call back using our form) now to start saving.
Our dedicated page has lots more information about business electricity.
"Very easy. Bea Luseni very efficient & knowledgeable."This review was posted by Alan Duffy on the 31st of March 2017
Super helpful and easy to work with
"Recommend this company in a heartbeat - Nicole Borneuf was super easy to talk to, was not pushy in the slightest, very helpful and replied with all my questions very professionally and did all she could to help. I had to deal with a few companies to sort my business energy out, all but Nicole were too pushy for my liking and I refused to follow through with them. Thank Nicole - you are a credit to your company, thank you for making the stressful energy change so easy."This review was posted by Mia Drew on the 29th of March 2017
An Extremely Competent Company
"Switch my business has not only helped my SME secure a good energy deal for the second year running but Jessica swiftly found a alternative supplier for me when I was let down on the day of switching by the new contractual provider I had chosen some 4 months previously. Being suddenly out of contract and without provider is everyone's energy nightmare. Greatest thanks."This review was posted by S McMillan on the 29th of March 2017
Helpful, friendly and we saved lots of money!
"Jessica Purnell was helpful and friendly, she made the whole process easy and simple AND we saved lots of money thanks Jess"This review was posted by Melanie Baker on the 23rd of March 2017
Quick & Easy
"Kabibi was very helpful and the whole process was very efficient. The one small reservation I had was that I was phoned up by Kabibi almost immediately having received my online quote - which wasn't enough time for me to finish reading the quotes! Fortunately she was able to assist me in a greater savings on both Gas & Electricity, and so as long as the switchover is seamless I will remain very happy with the service."This review was posted by Amanda Brown on the 21st of March 2017