Watchdog probes £16bn government energy deals

The government may have pushed up costs for consumers by awarding billions of pounds worth of contracts for renewables without any competition, the spending watchdog has said.

Early energy deals 'needed to help keep the lights on'

The Department for Energy and Climate Change says it has "needed to drive through reforms to secure investment in new generation to keep the lights on in the years and decades ahead" after suggestions it may have cost consumers by awarding eight renewables contracts too early.

A spokesperson said the National Audit Office's report recognises that the early deals were "designed to offer better value to bill-payers" by reassuring investors.

"Without that investment, projects would have been unable to go ahead or been significantly delayed - putting our future energy security at risk."

Watchdog probes £16bn government energy deals

Early contracts for five wind farm projects were agreed.
Early contracts for five wind farm projects were agreed. Credit: Gareth Fuller/PA Wire

The government may have pushed up costs for consumers by awarding billions of pounds worth of contracts for renewables without any competition, the spending watchdog has said.

Eight long-term renewable energy deals with a total value of £16.6 billion were awarded early to avoid delays in investment as the government brought in the new "contracts for difference" scheme, which guarantees an agreed price for electricity generated by low-carbon energy.

The contracts were awarded to develop five offshore wind farms, for two coal plants to convert to burning biomass and for one new biomass combined heat and power plant, the National Audit Office said.

The NAO believes the scale of the contracts - awarded without competition between developers - may have increased costs for consumers, who have to meet the price of developing low-carbon power through their energy bills.

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