Question

To ask the Secretary of State for Energy and Climate Change, what assessment her Department has made of the potential benefits of using (a) total system costs and (b) levelised electricity costs to evaluate and prioritise different forms of power generation.

DECC publishes estimates for the levelised costs of electricity generation for different technologies. The most recent 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

The above levelised costs however do not take into account all of the wider positive or negative impacts that a power station 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.

To systematise DECC’s evidence base on whole system impacts and be able to present these impacts on a technology by technology basis, DECC has commissioned external research at the end of 2014. The project has three phases. Phase 1 aims to define and estimate the current impacts on the system from each technology type. Phase 2 aims to further develop DECC’s internal modelling capability to formally deal with the evolution of the whole system impacts over time and Phase 3 aims to undertake scenario analysis to assess whole system impacts of different technologies across different states of the world. The work on the project is currently still ongoing.