Skip to main content

Wind Power: Finance

Volume 475: debated on Monday 28 April 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform what discount rate has been assumed in carrying out the cost benefit analysis for wind farms (a) at current levels of Government subsidy and (b) assuming no subsidy. (200021)

[holding answer 21 April 2008]: The Department does not carry out cost benefit analyses of individual wind farms. The Department has produced estimates of the levelised generation costs for fossil fuels (coal and gas) and low carbon technologies. Estimates for onshore and offshore wind use a pre-tax commercial discount rate of between 10 and 12 per cent.

The Department uses the Treasury Green Book social discount rate to estimate the present value of the resource cost to the economy of low carbon generation technologies compared with generation using fossil fuels.