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Offtaker of Last Resort

Volume 575: debated on Monday 10 February 2014

I can announce that we intend to publish before recess a consultation on the Government’s proposal for an offtaker of last resort mechanism, which will support investment in independent renewable electricity projects.

This Government are committed to delivering greener energy at least cost, as well as ensuring ongoing security of electricity supplies. The Government’s electricity market reform (EMR) programme provides an ambitious package of measures to incentivise the investment needed to replace the UK’s ageing electricity infrastructure with a more diverse and low-carbon energy mix. Up to £110 billion of capital investment is needed from now until the end of the decade. The Government’s objectives for EMR are to: ensure a secure electricity supply; ensure sufficient investment in sustainable low-carbon technologies; and minimise costs to, and ensure value for money for consumers.

It is imperative that independent renewable generators are able to access the energy market and help deliver this goal. The offtaker of last resort will be vital to improve the route-to-market options for such generators, which will help unlock a significant pipeline of projects and bring essential competition, diversity and innovation to the market.

The offtaker of last resort will provide eligible renewable electricity generators with a guaranteed “backstop” route-to-market at a specified discount to the market price.

The document published will outline all the key design details for the offtaker of last resort mechanism and will be accessible at: I will also be depositing copies of the consultation document in the Libraries of both Houses.