Wind Power: Cost-effectiveness

Energy and Climate Change written question – answered on 10th November 2010.

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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 he has made of the cost-efficiency of producing carbon-free electricity from onshore wind farms compared with (a) nuclear power and (b) other methods; and if he will make a statement.

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

The following table is taken from Mott Macdonald (2010) and gives 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.

Table 1: Mott Macdonald (2010) levelised costs (Case 1: 10% discount rate, 2009 project start at today's EPC prices, with mixed FOAK/NOAK)
Levelised c ost Gas CCGT Gas CCGT with CCS-FOAK ASC coal ASC coal with CCS-FOAK Coal IGCC- FOAK Coal IGCC with CCS-FOAK Onshore wind Offshore wind-FOAK Offshore wind R3-FOAK Nuclear PWR-FOAK
Capital costs 12.4 29.8 33.4 74.1 61.7 82.0 79.2 124.1 144.6 77.3
Fixed operating costs 3.7 7.7 8.6 18.6 9.7 17.7 14.6 36.7 45.8 12.2
Variable operating costs 2.3 3.6 2.2 4.7 3.4 4.6 - - - 2.1
Fuel costs 46.9 65.0 19.9 28.7 20.3 28.3 - - - 5.3
Carbon costs 15.1 2.1 40.3 6.5 39.6 5.5 - - - -
Decomm and waste fund - - - - - - - - - 2.1
CO2 transport and storage - 4.3 - 9.6 - 9.5 - - - -
Steam revenue - - - - - - - - - -
Total levelised cost 80.3 112.5 104.5 142.1 134.6 147.6 93.9 160.9 190.5 99.0

Mott Macdonald (2010), UK Electricity Generation Costs Update, available at:

It should be noted that for the purposes of presentation, the table only gives either 'FOAK' (first-of-a-kind) prices or 'NOAK' (nth-of-a-kind) prices for each technology. On offshore wind, for example, it shows offshore wind 'FOAK' prices, whereas the round 2 technology may be considered to have progressed towards 'NOAK' prices. Mott Macdonald estimate 'NOAK' offshore wind costs at £125/MWh (10% discount rate, 2009 project start at today's EPC prices).

Does this answer the above question?

Yes1 person thinks so

No4 people think not

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Norfolk Dumpling
Posted on 11 Nov 2010 2:02 pm (Report this annotation)

1) This written answer is political "I'm seriously out of my depth, get me out to an other place, gibberish".
2) In words of plain language "What is a "levelised cost"?"
3) Does this table account for the 100%, 24/365 backup required by onshore and offshore wind power stations? {And other renewables?}
4) What PEER-REVIEW supports the table?
5) Please ask Charles Hendry to provide a written reply explaining what the written reply is supposed to answer. Could he at least try to read the question?

Peter Rowberry
Posted on 11 Nov 2010 2:28 pm (Report this annotation)

It appears that the table excludes the cost of waste disposal and decommissioning. Can someone ask Charles what figures he has used to calculate these costs and whether and how they have been discounted?

Pete Rowberry, No money for nuclear campaign

Steve Davies
Posted on 18 Nov 2010 1:30 pm (Report this annotation)

As the originator of this question what I really want to know is what research the government has referred to that compares the costs and benefits of different means of achieving reductions in emissions, i.e the range of renewable generation technologies, insulation of buildings, improvement of fuel efficiency of transport etc.