“As you may be aware, energy bills are made up of a combination of the commodity cost (the fuel consumed) and non-commodity costs. Within the non-commodity costs are government originated charges including Contracts for Difference (CfD).
CfD is an Electricity Market Reform (EMR) mechanism to help the UK meet its carbon reduction targets and ensure the security of electricity supply.
The CfD costs vary annually due to wholesale price fluctuations and the amount of CfD generation produced in each year. These costs do not originate from npower and are instead industry-led, met by a levy applied by industry bodies to all energy suppliers.
The costs are then passed onto customers and, as a supplier we are now in a position to invoice customers for these charges.
As a result, invoices will shortly be released for the CfD pass through reconciliation for energy usage between 1st January 2018 and 30th September 2018. This is to cover retrospective changes to the previous reconciliation charge
primarily due to Green Excluded Electricity (GEE) exemptions. GEE is one of the mechanisms which exempts our demand from the CfD Scheme and is designed to not disadvantage imported green energy generation from other European Union countries.
Please refer to the attached letter for further information.”
Npower Letter