Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate his Department has made of the seasonal electricity storage capacity that will be required to deliver the net zero target.
Answered by Anne-Marie Trevelyan
Longer duration storage, including seasonal electricity storage, can help manage variation in generation and demand over long periods of time by storing excess generation until times when generation sources are less available or demand is greater. Analysis[1] suggests that longer-duration storage could reduce system costs by replacing gas-fired generation and reducing the requirement for other low-carbon generation.
The analysis demonstrates that there are a number of scenarios for generation and storage that could deliver net zero. The electricity market should determine the best solutions for very low emissions and reliable supply of electricity, at a low cost to consumers.
[1] Modelling 2050: electricity system analysis, https://www.gov.uk/government/publications/modelling-2050-electricity-system-analysis
Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate his Department has made of the capital cost of seasonal electricity storage capacity.
Answered by Anne-Marie Trevelyan
There are a range of technologies that could provide longer duration storage, including seasonal electricity storage. BEIS has published technical data and cost projections for electricity storage technologies that could be commercially deployed in the future, available here: https://www.gov.uk/government/publications/storage-cost-and-technical-assumptions-for-electricity-storage-technologies. This report shows that the capital costs of the different technologies vary widely.
Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether top-up payments to be made to third parties are permissible, under the Contracts for Difference regime.
Answered by Anne-Marie Trevelyan
The Low Carbon Contracts Company (LCCC) pays electricity generators that have signed a Contract for Difference (CfD) a flat, indexed, rate for the electricity that they produce over a 15-year period. The amount paid is the difference between the ‘strike price’ (a price for electricity, typically determined during a competitive auction process) and the ‘reference price’ (a measure of the average market price for electricity in the GB electricity market).
The CfD standard terms and conditions set out that payments to the generator will be made to the UK based account that the generator notifies the CfD Counterparty they want the payment to be made to.
Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether it is permissible under the Contracts for Difference regime for top-up payments to be made to third parties outside the UK.
Answered by Anne-Marie Trevelyan
The Low Carbon Contracts Company (LCCC) pays electricity generators that have signed a Contract for Difference (CfD) a flat, indexed, rate for the electricity that they produce over a 15-year period. The amount paid is the difference between the ‘strike price’ (a price for electricity, typically determined during a competitive auction process) and the ‘reference price’ (a measure of the average market price for electricity in the GB electricity market).
The CfD standard terms and conditions set out that payments to the generator will be made to the UK based account to which the generator notifies the CfD Counterparty they want the payment to be made.
Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to prevent tax avoidance by participants in the Contracts for Difference scheme.
Answered by Anne-Marie Trevelyan
The Contracts for Difference (CfD) scheme is the Government’s main mechanism for supporting low carbon electricity generation. The Low Carbon Contracts Company (LCCC) works with CfD generators to ensure that they deliver on their contractual commitments to build and operate low-carbon electricity generating stations. The LCCC pays CfD generators for the low-carbon electricity that they produce. As with any other commercial undertaking operating within the UK, it is for each electricity generator supported by the CfD scheme to pay its taxes in accordance with UK tax rules.
Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to his Department's BEIS Electricity Generation Costs (2020) published on 24 August 2020, what estimated value for the annual decline in performance of offshore wind was used in that report.
Answered by Anne-Marie Trevelyan
BEIS estimates a constant load factor and availability across the lifetime of an offshore wind farm, and therefore a constant performance. This is based on research performed by Arup (2016)[1] and independently peer-reviewed by Professor Derek Bunn (2020)[2].
BEIS also assume an improvement in load factors in future as turbines deployed in wind farms increase in size, and this relationship is discussed in detail in a published study performed by DNV GL (2019)[3].
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[1] ‘Arup (2016): Review of Renewable Electricity Generation Cost and Technical Assumptions’ https://www.gov.uk/government/publications/arup-2016-review-of-renewable-electricity-generation-cost-and-technical-assumptions
[2] ‘Peer review of 2019 electricity generation cost updates’ https://www.gov.uk/government/publications/peer-review-of-2019-electricity-generation-cost-updates
[3] ‘Potential to improve load factor of offshore wind farms in the UK to 2035’ https://www.gov.uk/government/publications/potential-to-improve-load-factor-of-offshore-wind-farms-in-the-uk-to-2035
Asked by: Graham Stringer (Labour - Blackley and Middleton South)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to his Department's BEIS Electricity Generation Costs (2020) published on 24 August 2020, if he will publish the empirical evidence, other than bid prices, underlying the estimate of (a) falling capital and (b) operational costs in the wind sector, (i) offshore and (ii) onshore in that report.
Answered by Anne-Marie Trevelyan
The estimates of (a) falling capital and (b) operational costs for (i) onshore and (ii) offshore wind generation are informed by a variety of internal and external evidence sources. These include published estimates from Arup (2016)[1] and DNV GL (2019)[2] as well as internal estimates informed by stakeholders and external commentators, such as Bloomberg[3], Baringa[4], Aurora[5], and others. These assumptions have also undergone an independent peer-review by Professor Derek Bunn (2020)[6], and more detail on specific assumptions can be found in this publication.
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[1] ‘Arup (2016): Review of Renewable Electricity Generation Cost and Technical Assumptions’ https://www.gov.uk/government/publications/arup-2016-review-of-renewable-electricity-generation-cost-and-technical-assumptions
[2] ‘Potential to improve load factor of offshore wind farms in the UK to 2035’ https://www.gov.uk/government/publications/potential-to-improve-load-factor-of-offshore-wind-farms-in-the-uk-to-2035
[3] https://about.bnef.com/new-energy-outlook/
[4] “An analysis of the potential outcome of a further ‘Pot 1’ CfD auction in GB”, https://www.baringa.com/getmedia/99d7aa0f-5333-47ef-b7a8-1ca3b3c10644/Baringa Scottish-Renewables UK-Pot-1-CfD-scenario April-2017 Report FINA/
[5] www.auroraer.com
[6] ‘Peer review of 2019 electricity generation cost updates’ https://www.gov.uk/government/publications/peer-review-of-2019-electricity-generation-cost-updates