asked Her Majesty's Government:
Whether they have calculated the relative cost of producing 1 per cent of the energy required by the United Kingdom annually by 2020 in each of the following ways: (a) off-shore wind turbines; (b) on-shore wind turbines; (c) photovoltaic installations on dwelling; and (d) solar panels on dwellings and, if so, what the totals are. [HL4493]
The cost of producing 1 per cent of the UK's energy in 2020 using these different technologies is given in the table below. Costs are resource costs, estimated on the basis of 1740TWh final energy demand in 2020. Resource costs are the levelised costs of individual technologies, net of the cost of a counterfactual technology. Costs do not include costs of additional network investment, or other hidden costs (eg transaction costs). Costs assume that this level of production of each technology is technically feasible, and does not take account of potential barriers to development, nor does it make assumptions as to the cost of any financial incentive that might be required to bring forward development.
Cost of 1% energy in 2020 £billion (1) Low High Onshore Wind(2) 0.2 0.7 Offshore Wind 0.4 0.6 Photovoltaic Installations (2kW)(3) 4.4 5.9 Solar thermal panels (2.5kW)(4) 0.6 1.3
Cost of 1% energy in 2020 £billion (1)
Photovoltaic Installations (2kW)(3)
Solar thermal panels (2.5kW)(4)
(1) Costs are at 2008 prices, not discounted.
(2) Onshore and offshore wind are based on assumptions from Redpoint et al (2008). http://renewableconsultation.berr.gov.uk/related_documents. The range for onshore and offshore wind reflects the range of assumptions as to capital costs, discount rates and site characteristics.
(3) Solar Photovoltaic costs are based on independent research from Element Energy (2008) www.berr.gov.uk/energy/sources/sustainable/microgeneration/research/page382 08.html.
The range for photovoltaic installations reflects the difference between retrofit and new-build costs, though note that it is unlikely that there will be sufficient domestic new-build before 2020 to deliver 1 per cent of the UK's energy requirement in 2020 using PV panels on new-build alone. The counterfactual for domestic photovoltaic installations is assumed to be grid electricity and counterfactual costs are based on projected domestic electricity prices.
(4) Solar thermal costs are based on independent research by NERA (forthcoming) and Enviros (2008) http://renewableconsultation.berr.gov.uk/related_documents. The range approximates the difference between new-build and retrofit costs, though note that it is unlikely that there will be sufficient domestic new-build before 2020 to deliver 1 per cent of the UK's energy requirement in 2020 using solar panels on new-build alone. Resource cost depends heavily upon the counterfactual heating technology. Assumed shares of electrical heating and boilers displaced are based on the NERA/ Enviros analysis.