Electricity Generation

Energy and Climate Change written question – answered on 14th January 2014.

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Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury)

To ask the Secretary of State for Energy and Climate Change what estimate he has made of the average cost of generating 1 MWH of electricity by (a) offshore wind, (b) onshore wind, (c) gas, (d) oil, (e) coal and (f) nuclear power.

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change

DECC has published levelised costs estimates of various generation technologies on the DECC website since 2010. The levelised cost of a particular generation technology is the ratio of the total costs (including construction and operating costs) of a generic plant to the total amount of electricity expected to be generated over the plant's lifetime (per megawatt hour). They do not include revenues or support payments. These are available on the following website:

https://www.gov.uk/government/collections/energy-generation-cost-projections

DECC's most recently published figures for current and future levelised costs are available in the following report Electricity Generation Costs (December 2013):

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/269888/131217_Electricity _Generation_costs_report_December_2013_Final.pdf

Table 1 as follows is taken from this report, and shows a range of levelised cost estimates for projects starting pre-development in 2013 and 2019 for selected technologies, using a 10% discount rate. Please see the report for more information, including cost estimates for new coal equipped with carbon capture and storage. Please note that we have not published levelised cost estimates for oil plants.

Table 1: Levelised cost estimates for selected electricity generation technologies, 10% discount rate, sensitivities around high/low capital costs and fuel prices
£/MWh
  Projects starting pre-development in 2013 Projects starting pre-development in 2019
Onshore Wind >5 MW UK 80-125 79-123
Offshore R2 Wind 107-139 101-132
Offshore R3 Wind 113-150 104-141
CCGT 58-102 63-109
Nuclear 78-107 70-94
Coal-ASC with oxy combustion CCS (FOAK) - 80-143
Coal IGCC with CCS (FOAK) - 96-183
CCGT with post combustion CCS (FOAK) - 64-128

Levelised cost estimates 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, discount rate and other drivers and this means that there is significant uncertainty around these estimates.

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