What is it?
The Offtaker of Last Resort (OLR) is a government scheme that aims to promote the availability of power purchase agreements (PPA). It is intended as a last resort to help renewable generators who cannot get a PPA through the usual commercial means.
It’s part of the government’s wider programme on Electricity Market Reform.
You can find out more on this section of our site and on the Department of Energy and Climate Change website.
Who’s it for?
It’s only available to eligible renewable Investment Contract Contracts for Difference (CFD) generators. For more details, see: Information for Generators.
How does it work?
The scheme provides an alternative route to market for eligible generators by facilitating a backstop power purchase agreement (BPPA) between the generator and a licensed supplier. This is achieved through a competitive auction process – the OLR auction.
The licensed supplier will buy the electricity produced under a BPPA at a specified discount below the market reference price. This ensures the OLR route to market is a genuine ‘last resort’.
Roles and responsibilities
Our role is to administer the scheme on behalf of government. We’ll do this by:
- assessing generators’ eligibility
- running OLR auctions
- Running a levelisation process, to ensure that the successful bidder’s costs for entering into a BPPA are shared among all licensed suppliers.
Licensed electricity suppliers
Licensed suppliers we determine to be mandatory licensed suppliers for a given OLR year must bid in all OLR auctions in that year. We will publish a list of the mandatory suppliers in this section of our site before each OLR year starts. All other licensed suppliers can bid in an OLR auction too.
All licensed suppliers are required to participate in OLR levelisation.
To find out more, see Information for Licensed Suppliers.