DECC calls for PPA evidence over fears market has ‘deteriorated’

The Department of Energy and Climate Change (DECC) has called on independent renewable generation developers to supply the department with evidence to support claims that the Power Purchase Agreement market has deteriorated.

The department has noted that some generators are “reporting a decline in the terms they are being offered for PPAs.”

As investment in renewables typically involves a substantial initial investment, it is imperative that such long-term contracts which guarantee the purchase of the power offer the rewarding and fair terms.

Therefore, Government is calling on generation developers to provide DECC with evidence to assess and address barriers to market access that independent renewable generators are experiencing.

In order to meet climate obligations and energy requirements, Government estimates that it needs to attract £110 billion of investment in low-carbon forms of generation over the next ten years.

Responses gathered over July 5-August 16 will be used to shape Government’s understanding of the PPA market and help refine proposals set out in the draft Energy Bill.

Ed Gill, Head of External Affairs at Good Energy, the UK's only 100 percent renewable electricity supplier said: “Without new, independent investment, Electricity Market Reform will fail to achieve its objectives, something that Whitehall officials have been slow to realise. The current proposals are built around the needs of the big, vertically-integrated energy companies and there is a genuine risk of creating a barrier for new entrants.

“So whilst we welcome today’s Call for Evidence, it is a shame that we’ve had to wait over 18 months since the proposals were first published;  it could be too little, too late. DECC needs to act decisively and quickly by simplifying the FIT Contract for Difference or replacing it with a more straightforward alternative.”

DECC’s document; ‘A call for evidence on barriers to securing long-term contracts for independent renewable generation investment’ can be read in its entirety here