Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the report titled Auctions for allocation of offshore wind contracts for difference in the UK, published in February 2019, what assessment he has made of the implications for his policies of the finding by Oxford Institute for Energy Studies that auction strike prices are unlikely to be indicative of underlying costs for renewable generators.

The Contracts for Difference (CfD) scheme operates as a competitive auction where the strike price successful participants receive is based on the clearing price, which is a product of bid prices. It is for developers to consider a bid price that is sustainable for their project, based on their own, forward-looking assessment of their likely project costs and revenues, and projects are only paid for the electricity they generate.

The Department publishes its own view of future electricity generation costs by technology – the latest version is from 2020, and is available here: https://www.gov.uk/government/publications/beis-electricity-generation-costs-2020.