Receive regular updates via email

The UK electricity market reform – which are the CFDs to look out for

A new Energy Act to attract private investment to the UK electricity market passed into law in December 2013, and an Electricity Market Reform delivery plan to transform the country to low-carbon energy generation was published. If you’re considering embarking on some CFD related trading in energy investments in the UK and elsewhere, you may be wondering what the new energy strike prices could mean for your portfolio.

The UK government will need huge extra investment to successfully meet its commitment to both 2020 carbon emissions targets and reliable energy provision. The new mechanism to support this is called the Feed-in Tariff: Contract for Difference (CFD), and works by stabilizing revenues to energy generators, allowing them to commit to long-term investment in new, lower-carbon energy infrastructure. Generators receive a an amount needed to restore revenues to their former level, also knows as a top-up, when the market rate is lower than the strike price, and pay out when it’s higher. The government hopes this will encourage both large and smaller investors in cleaner energy generation by making their returns more reliable. It also creates new opportunities which may appeal to investors with a ‘green’ investment agenda.

CFDs have been around since the early 1990s, and became more popular around the turn of the current century when traders realized the potential in their substantial leverage. A small investment can be used to access a large amount of assets, and trading is done on the margin. This can result in huge gains, but also huge losses, and it’s worth noting most professional traders underwrite their CFDs with more predictable futures trading. Their appeal for newer investors is the comparatively low requirements for both capital and commitment.

The new energy funding mechanism is due to commence in 2014-15 and is intended to replace the existing ROCs (Renewable Obligation Certificates) which currently exist to support cleaner energy technologies – a major difference being the inclusion of nuclear energy generation projects in the CFD scheme.

The UK is a world leader in wind power generation, and based on the strike prices issued in December 2013, research suggests investors can expect offshore wind projects commissioned in 2014-18 to yield up to 12% returns – slightly more favorable than those from ROCs, which will continue to be available until 2017. Prices for onshore wind projects have been fixed somewhat lower. Some commentators believe the strike prices will require further refinement before they create a significantly more attractive investment opportunity.

CFD trading can reap rewards but is notoriously risky. If you’re planning to invest through CFDs, always spread your risk to limit your exposure.

Manage Liquidity Issues through Online Payday Loans

If you are having trouble meeting some of your financial obligations or are weighed down by an emerging problem in your finances, then you should consider finding a bailout plan that can support your cash position until you receive your next paycheck. Like the US the UK faces some major challenges ahead amid the lingering problems across the region. There’s definitely a great deal of concern amongst the working class, with continuing pressure to earn more amid limited job opportunities. One also has to contend with a tighter credit regime and rising interest rates. Feeling the brunt on both ends of the spectrum, you may need to find a reliable funding support to help make ends meet. Under these prevailing conditions, you may want to look for the best sources for payday loans.

Looking for Instant Cash Solutions?
Financial managers stress the importance of proper use of payday loans. This credit option should only be used during emergencies and short term cash shortfalls. UK working professionals can borrow an amount ranging from £100 to £1000. The funds can be used for many things such as settling bills that are about to become due or to pay for emergency repairs on your car or in your home. This is an ideal alternative to banks and similar lenders. These other loan sources may force you to borrow more than the amount that you need, which translates to higher interest payments, despite the low APR.

Rollovers and Long Term Use of Payday Loans
UK consumers and working professional who observe sound management practices will not have any problem when they avail of this short term funding support. It is clear to them at the very outset that payday loans are meant to be used as short term financial tool. This means that you need to resolve payment issues and concerns before you decide to submit your loan request. There are two things that you must remember when it comes to payday loans. First, unsecured credit option comes with a high APR and it could be disastrous if you use them longer than the recommended period. Second, you must avoid rollovers at all cost as these can drag you into a vicious debt cycle.

Short Term Use of Payday Loans
Payday loans allow you to receive funds right away and use the same to address emergencies and unforeseen expenses. However, you have to borrow only the amount that you require and adjust your budget so you can repay the loan when when it is due. Remember the most important rule of payday loans – pay the loan on time. While some lenders offer the option of term extension, rollovers or even taking out a second loan to pay off the first one can only make matters worse.