Department for Business, Energy and Industrial Strategy written question – answered at on 26 June 2020.
Paul Maynard
Conservative, Blackpool North and Cleveleys
To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to his Answer of 9 June 2020 to Question 51817 on Tidal Power: Swansea Bay, what range of hurdle rates, comparable to those more established renewable energy technologies, such as solar PV, onshore wind and large hydropower, were used for the Swansea Bay tidal lagoon value for money assessment.
Kwasi Kwarteng
The Minister of State, Department for Business, Energy and Industrial Strategy
The correct answer should have been:
The hurdle rates applied across the portfolio of tidal lagoons in the Department’s value for money assessment[1] are shown in Table 1. The hurdle rates for other low carbon technologies estimated at the time of the value for money assessment are shown in Table 2.
Table 1: Range of hurdle rates applied to proposed programme of tidal lagoons[2]
Hurdle Rate Scenario | Hurdle rate (real terms, pre-tax) |
Low | 6.2% |
Central | 8.0% |
High |
|
Table 2: Selected hurdle rates for other low carbon technologies (up to date at time the assessment was undertaken)[3]
Technology | Hurdle rate (real terms, pre-tax) |
Onshore wind | 6.7% |
Offshore wind | 8.9% |
Solar PV (>5MW) | 6.5% |
Nuclear | 8.9% |
Gas with CCUS (first of a kind) | 11.3% |
Hydro (>5MW) | 6.9% |
[1] Available at: www.gov.uk/government/publications/swansea-bay-tidal-lagoon-value-for-money-assessment
[2] Source: BEIS commercial advisory
[3] Source: BEIS Electricity Generation Costs Report (2016), available at: www.gov.uk/government/publications/beis-electricity-generation-costs-november-2016
Kwasi Kwarteng
The Minister of State, Department for Business, Energy and Industrial Strategy
The hurdle rates applied across the portfolio of tidal lagoons in the Department’s value for money assessment[1] are shown in Table 1. The hurdle rates for other low carbon technologies estimated at the time of the value for money assessment are shown in Table 2.
Table 1: Range of hurdle rates applied to proposed programme of tidal lagoons[2]
Hurdle Rate Scenario | Hurdle rate (real terms, pre-tax) |
Low | 6.2% |
Central | 8.0% |
High |
|
Table 2: Selected hurdle rates for other low carbon technologies (up to date at time the assessment was undertaken)[3]
Technology | Hurdle rate (real terms, pre-tax) |
Onshore wind | 6.7% |
Offshore wind | 8.9% |
Solar PV (>5MW) | 6.5% |
Nuclear | 8.9% |
Gas with CCUS (first of a kind) | 11.3% |
Hydro (>5MW) | 6.9% |
[1] Available at: www.gov.uk/government/publications/swansea-bay-tidal-lagoon-value-for-money-assessment
[2] Source: BEIS commercial advisory
[3] Source: BEIS Electricity Generation Costs Report (2016), available at: www.gov.uk/government/publications/beis-electricity-generation-costs-november-2016
Secretary of State was originally the title given to the two officials who conducted the Royal Correspondence under Elizabeth I. Now it is the title held by some of the more important Government Ministers, for example the Secretary of State for Foreign Affairs.
