REA response to report by the Comptroller and Auditor General on CfD auction

  • National Audit Office finds that a cap in the Government’s auction for low-carbon electricity generation has led to £100m a year rise in the cost of electricity.
  • NAO specifically criticising the cap on fuelled technologies (capped at 150MW) set in 2017
  • Renewable Energy Association calls on Government to scrap the cap on fuelled technologies at the next auction.

Commenting on the NAO investigation into the 2017 auction for low-carbon electricity contracts, James Court, Head of Policy and External Affairs at the Renewable Energy Association, said:

“This NAO report is confirmation of the industry’s concerns that Government intervention in the CfD auctions is raising costs for consumers. While this report focuses on fuelled technologies such as biomass and biomethane, similar reforms have unnecessarily excluded low-cost solar and onshore wind from competing.

“The fuelled technology cap was an unnecessary intervention. It created a restraint on technologies which can deliver cost effective power and heat, and the policy did not take into full account the wider benefits derived from more sustainable waste management. It additionally could have been designed in an alternative way to deliver more capacity at lower cost, as we made clear in our consultation response.

“In our view there should be no cap in the next auction, scheduled for spring 2019, and this report adds to that view.”

—ENDS—

For more information or to request an interview, please contact:

Mark Hofman
External Affairs Manager
+44 (0)20 7981 0862
mh[email protected]

Notes to editors

  • The NAO report “Investigation into the 2017 auction for low carbon electricity generation contracts” can be found online here.
  • The press release accompanying the NAO report can be found here.
  • Contracts for Difference are designed to encourage investment in low-carbon electricity generation. They fix the price that generators receive for their electricity for a set period, typically 15 years. The fixed price in the contract is known as the “strike price”. Energy users pay top-ups if the prevailing market price is below the strike price. Since 2012, the government has awarded 47 CfDs to projects that use technologies such as wind, solar and nuclear power.

About the Renewable Energy Association (REA)

The Renewable Energy Association represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and recycling. It is the largest renewable energy and clean technology (including energy storage and electric vehicles) trade association in the UK, with around 550 members, ranging from major multinationals to sole traders.

For more information, visit: www.r-e-a.net