Question

To ask the Secretary of State for Energy and Climate Change, what assessment he has made of the effect of proceeding with contract for difference auctions prior to the introduction of the Offtaker of Last Resort.

My officials have worked closely with developers and other stakeholders in working up the Offtaker of Last Resort proposals. The policy design is already at an advanced stage, and the detail of the proposals has been recently consulted on. We are on track to deliver the final policy and introduce enabling regulations ahead of first allocation of CfDs. CfD applicants will, therefore, have a high degree of clarity about the arrangements for OLR, well in advance of the first auctions.

After the regulations come into force, time will be required to establish the processes for allocation of backstop PPAs and apportionment of their costs between licensed suppliers, but we do not consider that this will constitute a significant impediment to projects which secure CfDs through the auction. Furthermore, the OLR has been designed to be a last resort and generators will need to have commercial offtake arrangements in place in order to secure investment.