The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts released a statement regarding the Contracts for Difference (CfDs) under the ID-ER scheme.
Hodge’s statement follows National Audit Office analysis which highlighted the costs and benefits of DECC’s final investment decision enabling for renewables (FID-ER) process.
“The UK faces a big challenge to move to a more sustainable electricity market and deliver on our climate change commitments. These early contracts are an important part of that.
DECC is aiming to generate 30% of electricity from renewable sources by 2020. It awarded these contracts to 8 projects, without price competition, at a cost to consumers of £16.6 billion.
Yet between them these projects will generate just 5% of the renewable electricity required. At the same time by committing so much funding up front the Department has limited its options for future investments.
I am also frustrated that, despite the huge consumer subsidy that has gone into supporting these projects, the Department has failed to put in place any arrangements to recoup consumers’ money if providers make bigger-than-expected profits from these projects. This is an issue we have raised as a Committee before: private providers must not be allowed to make excessive profits at the expense of consumers and taxpayers.
I look forward to discussing these issues with departmental officials when they appear before us on 2 July 2014.”