Question

To ask the Secretary of State for Energy and Climate Change, pursuant to the contribution of the Minister of State for Energy and Climate Change of 17 June 2015, Official Report, columns 108-112 WH, what the evidential basis is for the statement that the price of wholesale electricity will rise into the 2020s.

DECC’s projections of electricity prices are produced using a detailed model of the electricity market1. Key drivers of the price include fossil fuel prices and carbon prices (including accounting for carbon allowances and the carbon price floor). More details of the Department’s methodology for projecting fossil fuel prices, carbon prices and the carbon price floor can be found at the following:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/360598/DECC_2014_fossil_fuel_price_projections.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/360277/Updated_short-term_traded_carbon_values_used_for_UK_policy_appraisal__2014_.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/81274/consult_carbon_price_support_ia.pdf

https://www.gov.uk/government/publications/carbon-price-floor-reform.

[1] https://www.gov.uk/government/publications/dynamic-dispatch-model-ddm