draft Contracts for Difference (Allocation) (Excluded Sites) amendment regulations 2016

Alan Whitehead Excerpts

Monday 14th November 2016 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I reflect the Minister’s pleasure at serving under your chairmanship, Mrs Moon. He made a good job of attempting to explain what on earth the draft regulations are all about. To the extent that there can be clarity, he has provided it, so we should not be detained too long by this business.

Labour Members welcome the thrust of the statutory instrument and the greater clarity that has been achieved regarding the questions I asked in a previous statutory instrument Committee about the next allocation round and the future of CfD allocations, and in the light of the publication that arose last Thursday, which sets out in greater detail what allocations will consist of and the support for future allocation rounds over the next period. We still have several questions about that arrangement, particularly about how it is going to relate to the overall progress of the levy control framework, but that is not really a discussion for today.

I have two specific questions on how the changes to the 2014 regulations are going to work in practice. First, the changes will considerably widen what was in the excluded periods in the 2014 regulations, which could give rise to substantial greater questions of possible interpretation about what it means not to have delivered within 13 months or to have been excluded from a further auction round for two years, given the circumstances in which that exclusion might have taken place. For example, someone wishing to put in an application for an allocation at a subsequent auction round may consider themselves to have been unfairly treated in how they were excluded by the widening of the regulations. Are processes in place that can provide for a legally robust way to ensure that that exclusion can be properly managed and that we are not going to open ourselves up to a series of actions that could be debilitating for the auction round when it comes to pre-qualifying for a subsequent auction and the process of putting in an auction bid? I would be grateful if the Minister clarified that.

Secondly, under the circumstances outlined, the regulations are not just about exclusions from future bidding, or an excluded period if someone has not either signed a CfD or undertaken the milestones in a CfD agreement previously. They are also about the extent to which otherwise frozen CfDs may be unfrozen for future use as a result of those people who are not taking up their CfDs in a proper way having perhaps put in a bid that was never realistic in the first place. It is a matter of making sure that the CfDs freed up by the implementation of that process are available for future auction processes.

As there is no impact assessment with the report other than the general impact assessment relating to the process overall, I wonder whether the Minister has looked at the circumstances where that release of CfDs might apply; whether he has made any assessment of what level that is likely to run at; and, if he has, what arrangements he might have in hand for ensuring that the CfDs will be recycled in an orderly manner when future auctions come up. It may be that they could be so significant as to lead to the possibility of further sub-auctions as the process develops. How significant might that part of the process be in carrying out the whole auction process in the most efficient way?