Sara Hawthorn 27 June 2014

Renewable contracts worth billions may not protect consumer interests according to Audit Office

Renewable contracts worth billions may not protect consumer interests according to Audit Office image

A new report from the National Audit Office claims contracts worth £16.6bn awarded to eight renewable generation projects are at risk of delay and may increase costs to the public.

The Final Investment Decision enabling for Renewables (FIDeR) launched in 2013 by the Department of Energy & Climate Change aimed to prevent delays to investments in renewable generation projects, and awarded early contracts to five off shore wind farms, two coal plant conversions to biomass and one biomass combined heat and power plant.

DECC also established the Contracts for Difference regime to support projects commissioned from 1 April 2015.

This scheme offers low-carbon electricity generators an agreed price for the electricity they will generate - known as the ‘strike price’ - providing support to the extent that the strike price exceeds the wholesale price for electricity. The regime will replace the Renewables Obligation and should offer better value for money by lowering financing costs.

However the report found that, despite the short term confidence boost to the renewable industry, the scale of the contracts have potentially increased costs to consumers due to the lack of competition involved in awarding the funds.

The report also found that the early contracts have taken 58% of the total funds available under Contracts for Difference until 2020-2021.

Amyas Morse, head of the National Audit Office, said: 'The Department of Energy & Climate Change awarded the early contracts without price competition to avoid an investment gap. In so doing it has brought forward investment decisions by at least five months.

'The investments supported should contribute towards the UK’s achieving its renewable energy target in 2020, but it is not clear that awarding fewer early contracts would have put the achievement of that target at risk.

'As the Contracts for Difference regime has the potential to secure better value for consumers through price competition, committing so much of the available funding through early contracts, without competition, has limited the Department’s opportunity to secure better value for money.'

SIGN UP
For your free daily news bulletin
Highways jobs

Senior Occupational Therapist

Essex County Council
£40637 - £49183 per annum
Job summaryWith us, you can achieve more - for yourself as well as those you work to support.We'll give you the tools and resources you need to enabl England, Essex, Harlow
Recuriter: Essex County Council

Covid Community Support Worker

Kirklees Metropolitan Council
£10.01 - £10.21 per hour
Do you want to help stop the spread of Covid-19 in Kirklees?  Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Senior Legal Officer A/B Contracts and Commercial

Kirklees Metropolitan Council
£34,728 - £42,821
We are looking for a motivated lawyer to work on a range of contract, procurement and commercial matters. Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Senior Communications Manager

Barnet London Borough Council
£47,841 - £52,886 Per Annum
We’re looking for someone with strong experience of leading on innovative communications to promote... Barnet (City/Town), London (Greater)
Recuriter: Barnet London Borough Council

Youth Justice Liaison & Diversion Worker

Barnet London Borough Council
£34,884 - £38,883 Per Annum
An exciting career opportunity has arisen for a full time enthusiastic and energetic Youth Justice Liaison & Diversion Worker from... Barnet (City/Town), London (Greater)
Recuriter: Barnet London Borough Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue