When we decided to invest in and become members of the Derril Water coop, I remember the deal being described as : (1) solar farm sells energy to Octopus Energy at 2p/kWh; (2) Octopus Energy would knock 6p/kWh off our bill for every kWh "our bit" of the PV output generated, but (3) Octopus Energy would be selling the electricity on the open market for whatever they could get for it.
It sounds like these were only guide prices applicable at that moment in time - Octopus Energy were not in fact taking the risk of guaranteeing us 6p/kWh and Derril Water would not have been guaranteeing Octopus power at 2p/kWh. I had understood that since the cost to Derril Water of generating electricity was stable - no fuel to buy in that would cause operating costs to fluctuate with external markets . . . then effectively we already had a Contract for Difference with Octopus Energy with a 'strike price' set low enough for Octopus to take the risk of never having to subsidise Derril Water.
Am I right, then, in thinking that in fact the existing deal is flexible, such that the price Derril Water will sell to Octopus will vary with external market prices, allowing Derril Water's price to rise or fall (even though the electricity it generates will cost no more or less to generate) then Octopus's offer to us will also rise with it?
CfD is being proposed to us as a means of stabilising our return - but I thought it was already stabilised - because the energy generation costs depend on the sun, not on the market.
What, actually, IS the present deal?