Question

To ask the Secretary of State for Energy and Climate Change, with reference to the Answer of 14 May 2014, Official Report, column 595W, on electricity, what assessment he has made of whether the ability of auctions to drive value for money is dependent on market plurality and competition; and if he will make it a formal objective of his Department to ensure that independent generators are able to compete in Contracts for Difference auctions on an equal footing.

The secondary legislation for the Electricity Market Reform programme contains provisions to move straight to allocation rounds, with competitive auctions setting the price where the demand for CfDs exceeds the available budget.

DECC analysis shows that the pipeline of projects is strong and can deliver a competitive outcome, whilst the Administrative Strike Price sets a cap to protect consumers.

More generally, the auction has been designed to encourage participation, and we are introducing the Offtaker of Last Resort (OLR) to support independent renewable generators by providing them with a guaranteed route to market and improving their ability to raise project finance.

DECC officials have worked closely with developers and other stakeholders on these proposals, and the approach to implementing the OLR is currently being consulted on.