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<p>We are on track to introduce enabling regulations to have the OLR mechanism in
place ahead of the first CfD allocation in Autumn 2014. This will include a final
version of the Backstop Power Purchase Agreement (BPPA) contract terms that generators
will be entitled to. Generators will therefore have a high degree of clarity about
the arrangements well in advance of the first auctions. We are shortly publishing
a draft version of the BPPA contract terms this week to give generators further clarity
on the terms they can expect.</p><p>Whilst the OLR will be in place, generators will
not be able to access a Backstop PPA contract immediately, with BPPA contracts being
available from April 2016 at the very latest. In light of the time taken to commission
projects and the likelihood that a PPA falls away and cannot be replaced, the period
between the legislation being in place and the first BPPA contract being available
is unlikely to have significant impacts in practice. This process has been tested
with stakeholders, including the Offtaker of Last Resort Advisory Group, and we continue
to work with Ofgem to bring forward the date when the first BPPA contracts can be
awarded.</p><p> </p>
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