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Electricity Generation

Volume 482: debated on Tuesday 11 November 2008

To ask the Secretary of State for Energy and Climate Change what estimate he has made of the average cost of generating 2 MW of power by (a) nuclear generation, (b) coal-fired generation, (c) gas-fired generation and (d) wind generation. (233327)

The generation cost of different technologies are measured in terms of levelised costs and are presented on a £ per megawatt hour basis. The Government have carried out analysis on generation costs in some detail in recent years to inform policy decisions. These estimates have been published as part of the Energy Review (2006) and Nuclear White paper (2008). Latest updates to those estimates suggest the following costs associated with generating 1 MWh of electricity, assuming a €35/tCO2 price for carbon:

£/MWh

Gas fired generation

52

Coal—fired generation

51

Nuclear generation

38

Wind (onshore)

72

Wind (offshore)

92

It should be noted that the estimates of levelised costs for different types of electricity generation are highly sensitive to the assumptions used for capital costs, fuel and EU ETS allowance prices, operating costs, load factor, and other drivers. The numbers quoted in the table represent levelised costs estimated as part of the Energy White Paper exercise, updated for fossil fuel prices used in the Government's analysis underpinning the Renewable Energy Strategy. In reality, there are large uncertainties and ranges around these figures.