Energy: Prices

(asked on 10th February 2021) - View Source

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

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent assessment he has made has he made of the effect of transmission charges on the pricing of contract for difference tenders; and is he will make a statement.


Answered by
Anne-Marie Trevelyan Portrait
Anne-Marie Trevelyan
Minister of State (Foreign, Commonwealth and Development Office)
This question was answered on 22nd February 2021

National Grid Electricity System Operator collects transmission charges to recover the cost of installing and maintaining the transmission system in Great Britain and the offshore electricity network infrastructure. These include a locational element to reflect network use as part of the requirement for cost reflective network charges.

Individual Contracts for Difference bidders will determine their bid prices based on their own assessment of expected costs and revenues. The price paid to each successful bid is based on the clearing price of a competitive auction.

However, the Department does set the maximum strike price each technology can receive (the Administrative Strike Price), which takes into account a broad range of factors. This incorporates our latest view of transmission charges, estimated for pipeline projects where possible using tariffs and network charging assumptions for each location (provided by National Grid).

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