Consumers have been left to pick up the bill for “poorly conceived and
managed” contracts worth £16.6 billion for renewable energy, MPs have said.
Contracts for eight renewable energy projects were awarded early and
without exposure to competitive bids to avoid delays in investment as the
Government brought in the new “contracts for difference” subsidies scheme.
These guarantee an agreed “strike price” for electricity generated by
low-carbon energy, with developers now set to bid for the contracts in
annual auctions.
The Commons Public Accounts Committee (PAC) said the Department of Energy
(Decc) had failed to secure best value for consumers by placing five
offshore wind projects and three biomass schemes early and without competition.
Decc’s own economic case shows no clear benefit from awarding the contracts
early. It said the department had no detailed knowledge and understanding
of developers’ costs and estimates and failed to protect consumers’
interests in the contracts.
Chairwoman Margaret Hodge MP said: “By awarding contracts worth up to £16.6
billion to eight renewable electricity generation projects without price
competition, the Decc failed to adequately secure best value for consumers.
Yet again, the consumer has been left to pick up the bill for poorly
conceived and managed contracts.”
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