The U.K. government didn’t get the best deal for consumers when it awarded 16.6 billion pounds ($26.8 billion) worth of clean-energy contracts, according to a parliamentary committee.
By awarding them early, and using more than half the budget for the contracts in the process, the government has hampered price competition, reduced the opportunity to test the market and failed to defend consumer interests, the Committee of Public Accounts said. The beneficiaries include Drax Group Plc, Dong Energy A/S, SSE Plc, Statoil ASA and Statkraft AS.
“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,” said Margaret Hodge, chair of the committee and a member of Parliament for the opposition Labour Party. “If the department had used price competition, it should have led to lower energy prices for consumers.” […]
The National Audit Office, which scrutinizes state spending on behalf of parliament, said in June the contracts may have been too generous to developers and not worth the risk to taxpayers.