Electricity Generation

Energy and Climate Change written question – answered on 8th November 2010.

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Photo of Graeme Morrice Graeme Morrice Labour, Livingston

To ask the Secretary of State for Energy and Climate Change what the production price per kWh is for each major electricity generating technology method.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

The following tables are taken from Mott Macdonald (2010) and give levelised cost estimates (average generation cost per megawatt-hour) for new build plants in the main large-scale electricity generation technologies in the UK, including onshore wind, offshore wind and nuclear, at current engineering, procurement and construction (EPC) contract prices.

Where technologies are emerging, costs are given on a First-of-a-Kind (FOAK) basis, which includes a cost premium associated with early projects.

Case 1: 10% discount rate, 2009 project start at today's EPC prices, with mixed FOAK/NOAK
Levelised cost Gas CCGT Gas CCGT with CCS - FOAK ASC coal ASC coal with CCCS - FOAK Coal IGCC - FOAK
Capital Costs 12.4 29.8 33.4 74.1 61.7
Fixed operating costs 3.7 7.7 8.6 18.6 9.7
Variable operating costs 2.3 3.6 2.2 4.7 3.4
Fuel costs 46.9 65.0 19.9 28.7 20.3
Carbon costs 15.1 2.1 40.3 6.5 39.6
Decomm and waste fund - - - - -
CO2 transport and storage 4.3 - 9.6 - 9.5
Steam revenue - - - - -
Total levelised cost 80.3 112.5 104.5 142.1 134.6
Levelised cost Coal IGCC with CCS - FOAK Onshore wind Offshore wind - FOAK Offshore wind R3 - FOAK Nuclear PWR FOAK
Capital Costs 82.0 79.2 124.1 144.6 77.3
Fixed operating costs 17.7 14.6 36.7 45.8 12.2
Variable operating costs 4.6 - - - 2.1
Fuel costs 28.3 - - - 5.3
Carbon costs 5.5 - - - -
Decomm and waste fund - - - 2.1
CO2 transport and storage - - -
Steam revenue - - - -
Total levelised cost 147.6 93.9 160.9 190.5 99.0
Source:

Mott Macdonald (2010), UK electricity generation costs update, available at:

http://www.decc.gov.uk/assets/decc/Statistics/Projections/71-uk-electricity-generation-costs-update-.pdf

The following are the levelised costs per MWh for projects started in 2017. They are all given here on the basis of Nth-of-a-Kind (NOAK) meaning it is assumed that all technologies have matured and there has been a cost reduction through learning. For some technologies this is expected to result in a reduction in costs.

Case 2: 10% discount rate: 2017 project start at projected EPC prices, all NOAK Coal
Levelised c ost Gas -CCGT Gas - CCGT with CCS ASC Coal ASC Coal+CCS Coal IGCC Coal - IGCCC with CCS Onshore Wind Offshore Wind Offshore Wind R3 Nuclear - PWR
Capital costs 11.2 20.7 28.7 47.8 33.7 46.5 71.7 89.4 97.0 49.6
Fixed operating costs 3.7 6.0 8.6 13.8 8.0 12.3 14.6 23.0 30.9 9.1
Variable operating costs 2.3 3.6 2.2 3.7 2.7 3.6 - - - 1.8
Fuel costs 49.8 64.7 19.9 27.6 19.6 27.2 - - - 5.2
Carbon costs 29.6 4.1 73.8 11.4 72.0 10.0 - - - -
Decomm and waste fund - - - - - - - - - 2.1
CO2 transport and storage - 3.5 - 7.6 - 7.5 - - - -
Steam revenue - - - - - - - - - -
Total levelised cost 96.5 102.6 133.2 111.9 136.0 107.1 86.3 112.4 127.9 67.8

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 European Union Emissions Trading Scheme allowance prices, operating costs, load factor, and other drivers. Meaning that there is significant uncertainty around these estimates.

The levelised costs reflect only the cost of power generation and its delivery to the grid. They do not reflect the availability to certain technologies of subsidy such as Renewables Obligation Certificates.

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