Hydroelectric Power: Costs

(asked on 14th December 2015) - View Source

Question

To ask the Secretary of State for Energy and Climate Change, when calculating grants and tax incentives whether her Department assesses the levelised cost of hydro plant over the expected actual lifespan or the shorter lifespan allowed in the levelised cost calculation when allocating grants and tax incentives.


Answered by
Andrea Leadsom Portrait
Andrea Leadsom
This question was answered on 17th December 2015

In comparing the costs of different electricity technologies in the future, DECC typically use the levelised costs of electricity 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 report, available at:


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/269888/131217_Electricity_Generation_costs_report_December_2013_Final.pdf


For hydro plants, DECC assumes a plant lifetime of 41 years for levelised cost purposes. This is taken from the below Arup report (section 6.8.4):


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/66176/Renewables_Obligation_consultation_-_review_of_generation_costs_and_deployment_potential.pdf.

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