Question

To ask the Secretary of State for Energy and Climate Change, if he will assess the effect of bringing forward by three years the contract for defence auctions on independent generators wishing to enter the auctions and the market conditions in which they will operate.

Auctions can be used to drive value for money once the market is sufficiently developed. We consider that market conditions are such that for some, more established technologies this will be the case. For established technologies, the proposed move to competition builds on the strong progress on cost reduction and the well-developed pipeline. For less established technologies, our aim is to ensure that they can deploy at levels which enable continued cost reduction and which ultimately support cheaper deployment in the long-term.

We continue to develop and implement our detailed proposals for competitive allocation of CfDs, which has the potential to improve value for money, encourage new entry and drive innovation. In developing our proposals we have also been mindful of the final EU Guidelines on State aid for environmental protection and energy 2014-2020 published on 9 April, which indicate the need for a move to competitive processes for some technologies.