FALSE – 2014 Parliamentary Question to the Department for Energy and Climate Change

The below Parliamentary question was asked by FALSE on Energy and Climate Change.

2

Baroness Verma

We are on track to introduce enabling regulations to have the OLR mechanism in place ahead of the first CfD allocation in Autumn 2014. This will include a final version of the Backstop Power Purchase Agreement (BPPA) contract terms that generators will be entitled to. Generators will therefore have a high degree of clarity about the arrangements well in advance of the first auctions. We are shortly publishing a draft version of the BPPA contract terms this week to give generators further clarity on the terms they can expect.

Whilst the OLR will be in place, generators will not be able to access a Backstop PPA contract immediately, with BPPA contracts being available from April 2016 at the very latest. In light of the time taken to commission projects and the likelihood that a PPA falls away and cannot be replaced, the period between the legislation being in place and the first BPPA contract being available is unlikely to have significant impacts in practice. This process has been tested with stakeholders, including the Offtaker of Last Resort Advisory Group, and we continue to work with Ofgem to bring forward the date when the first BPPA contracts can be awarded.