Electricity Generation: Costs

Energy and Climate Change written question – answered on 2nd December 2009.

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Photo of Charles Hendry Charles Hendry Shadow Minister (Energy and Climate Change)

To ask the Secretary of State for Energy and Climate Change what his most recent estimate is of the average cost of generating 1 MW of electricity by each different generating technology.

Photo of David Kidney David Kidney Parliamentary Under-Secretary, Department of Energy and Climate Change

The Government have carried out analysis on generation costs in recent years to inform policy decisions. Some of these estimates were published as part of the Energy Review (2006) at:

http://www.berr.gov.uk/files/file32014.pdf

More recently the Committee on Climate Change (CCC) have published estimated levelised costs (£/MWh, in 2008 prices) associated with 1 MWh of electricity generated, for their December 2008 report at:

http://www.theccc.org.uk/pdf/TSO-ClimateChange.pdf, as set out in table 1 and include construction, operation and maintenance costs and where applicable the cost of carbon allowances (EU emissions trading scheme). Moreover, for nuclear, they also include the costs of decommissioning and waste.

It should be noted that the estimates of levelised costs for different types of electricity generation are highly sensitive to the assumptions used for capital costs, fuel and EU ETS allowance prices, operating costs, load factor, and other drivers. In reality, there are large uncertainties and ranges around these figures.

Technology Levelised cost (£/MWh) 2010
Wind plant
Onshore wind (high wind) 65
Offshore wind (high wind) 83
Coal-fired plant
Coal-central fuel 54
Gas-fired plant
CCGT-central fuel 53
Nuclear plant
Nuclear 51
Source:

The Committee on Climate Change (2008) 'Building a low-carbon economy' p189.

The costs of most generation technologies have increased over the past 18 months, primarily due to increases in input prices. Work is ongoing to update Government's cost assumptions for different forms of generation.

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