Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, whether he has estimated the effect on consumer bills of the use of audited financial accounts and financial close announcements as a guide to underlying costs rather than strike prices.

The Contracts for Difference (CfD) scheme operates as a competitive auction where the strike price successful participants receive is based on the clearing price, which is a product of bid prices. It is for developers to consider a bid price that is sustainable for their project, based on their own, forward-looking assessment of their likely project costs and revenues. Once projects begin generating, it is the difference between this strike price and the wholesale electricity price that drives any impact on consumer bills, and projects are only paid for the electricity they generate. This means that an assessment along the lines of what The Honourable Member for Wycombe proposes would not reflect assumptions consistent with actual costs likely to be paid by consumers.

The Department publishes its own view of future electricity generation costs by technology – the latest version is from 2020, and is available here: https://www.gov.uk/government/publications/beis-electricity-generation-costs-2020.