The Department of Energy and Climate Change (DECC) failed consumers when it awarded billions of pounds worth of early contracts under the new large-scale renewable energy support scheme, according to an influential Commons committee.

DECC announced the early award of funds under the new contracts for difference (CfD) scheme in April this year to ensure investment in the sector continued in the run up to its official start in 1 April 2015. The tranche of funding represents 58% of the £28.6 billion CfD budget to the 2020/2021 tax year. Five of the eight projects were offshore wind farms.

A report released on Friday by the committee of public accounts said DECC had failed to get value for money.

“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,” said Margaret Hodge MP, chair of the committee. “Yet again the consumer has been left to pick up the bill for poorly conceived and managed contracts.

“The department argued that the early contracts were necessary to ensure continued investment. But its own quantified economic case shows no clear net benefit from awarding the contracts early.

“Indeed, if the department had used price competition, it should have led to lower energy prices for consumers who are already facing hefty charges,” added Hodge.

The EU approved the award under state aid rules in July adding that: “The selection of the projects was done in an open, transparent, competitive and non-discriminatory auction.”

The National Audit Office has also raised its own concerns that DECC overpaid in the early contracts.

Some in the industry have described the selection process as a negotiation, rather than a competition. The eligibility criteria for the early awards, published in March 2013, stipulated that projects must be more than 50MW in size. The following month Lark Energy connected the Wymeswold solar farm, which at 33MW, was the biggest in the country. There are still no 50MW solar farms connected to the UK grid.