Question

To ask the Secretary of State for Energy and Climate Change, pursuant to the Answer of 19 October 2015 to Question 11214, what guidance her Department offers to potential investors on comparing the costs of different electricity technologies in order to inform investment decisions.

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.