14:30 The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)

Sir Edward, it is a pleasure to serve under your guidance. This instrument amends regulations concerning the contracts for difference scheme and the capacity market. As a reminder to hon. Members, these two schemes were key elements of the electricity market reform programme that was introduced in the previous Parliament. Both the CfD scheme and the capacity market are designed to incentivise the significant investment required in our electricity infrastructure to keep costs affordable for consumers and to help meet our decarbonisation targets, while keeping our energy supply secure.

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14:51 Andrea Leadsom (Sleaford and North Hykeham) (Con)

The hon. Gentleman asked whether there was any means to control costs. As he would expect, costs are scrutinised very carefully. He will also be aware that a number of contracts for difference and a number of capacity market bids have been undertaken, although payments have not been made. Nevertheless, there is a big burden of contractual work that needs to be undertaken and that is where those operational costs have increased, but only by a small amount: in fact, it will be around 20p in additional operational costs on household electricity bills in 2016-17 at 2014 prices. As the hon. Gentleman would expect, we are very alert to the need to keep costs down—both the companies concerned and the Department of Energy and Climate Change—as well as to the importance of public consultation, and to scrutiny and debate in Parliament. We do not expect further significant increases in either budget, based on our expectations of current and future duties over the next couple of financial years.

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