Electricity: Costs

Department for Energy and Climate Change written question – answered on 3rd November 2015.

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Photo of Alan Brown Alan Brown Scottish National Party, Kilmarnock and Loudoun

To ask the Secretary of State for Energy and Climate Change, pursuant to the Answer of 19 October 2015 to Question 11214, what measure her Department considers to be an adequate comparator for costs of different electricity technologies in the future.

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

In comparing the costs of different electricity technologies in the future, DECC typically use the levelised costs of electricty generation. Levelised costs include capital and operating costs over the lifetime of a plant, as well as DECC estimates of projected fuel and carbon costs.

The most recent levelised cost estimates are available in the DECC Electricity Generation Costs (December 2013) report, available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/269888/131217_Electricity_Generation_costs_report_December_2013_Final.pdf

We are currently undertaking a comprehensive review of our evidence on levelised costs of electricity generation.

The above levelised costs however do not take into account all of the wider positive or negative impacts that a plant may impose on the electricity system. So far, DECC’s electricity modelling has considered these wider whole system impacts through a system wide cost-benefit analysis. DECC is currently undertaking a project, which aims to further systematise DECC’s understanding of the whole system impacts of electricity generation technologies.

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