Environment Protection: Taxation

Department for Energy and Climate Change written question – answered on 23rd June 2015.

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Photo of David Davies David Davies Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

To ask the Secretary of State for Energy and Climate Change, what assessment she has made of potential savings for her Department's spending in capacity payments if the carbon floor price was removed.

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change

My rt. hon. Friend the Secretary of State has not made an estimate of the impact of removing the Carbon Price Floor (CPF) on capacity payments. Removing the CPF would result in a change in the relative economics of coal and gas generation and so may affect the level at which individual plant bid under the Capacity Market. It is not clear whether the net effect of this would result in a reduction in the overall cost of the Capacity Market as the level of capacity payments depends on which plant sets the clearing price.

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