Electricity Generation

Department for Energy and Climate Change written question – answered on 26th February 2016.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

To ask the Secretary of State for Energy and Climate Change, with reference to the report, The Size and Performance of the UK Low Carbon Economy, published in March 2015, whether estimates of gross value added for electricity generation include (a) the value of renewable obligation certificates and (b) the element of the feed-in tariff and Contract for Difference prices which are above the market price of energy.

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

The report on the Size and Performance of the UK Low Carbon Economy is based on a bottom-up analysis of company accounts from those businesses participating in the sector.

The report estimates gross value added within the sector by taking gross profit less the sum of employment costs, depreciation and amortisation. This definition is consistent with the approach generally taken in official statistics as a measure of the value of goods and services produced in an area, industry or sector of an economy.

To the extent they are included within company accounts, the report captures the value of renewable obligation certificates and the element of the feed-in tariff which is above the market price of energy. However, this will exclude payments to householders and other non-business or charity electricity generators.

No element of Contracts for Difference (CfDs) will be included in the estimates as the report only covers the period 2010 to 2013, before the introduction of CfDs.

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