….as a small addendum, while we are on the subject of Contracts for Difference, here’s a near–certain winner for 2012 contest for ‘most understated statement of the year’. Turn to page 12 of the draft operational framework for Contracts for Difference (here in case you don’t have it in front of you). The document is talking about strike prices for CfDs.
‘for nuclear generation the major issue will be whether there are enough competitors to allow competitive price discovery’.
Well, I think we can say now can’t we, that the major issue is not ‘whether there are enough’ but ‘that there will not be enough’. Step forward EDF to negotiate a fair ‘administrative’ price setting arrangement, armed with a notice saying ‘and we might pull out as well’ . But DECC has got the future covered: on page seventeen, here they are again on that strike price :
‘for nuclear projects the strike price will be determined through an administrative price setting process until the conditions are in place to move to competitive forms of price discovery’.
So there. Just wait until someone, at some stage down the line builds a nuclear power station and they turn out not to be called EDF. Then it’s game on.