UK electricity generation costs update

1st June 2010

Topic(s): Economics, Energy efficiency

This report provides a summary and supporting documentation for Mott MacDonald’s assessment of current and forward power generation costs for the main large scale technologies applicable in the UK. One theme of this report is that determining the costs of generation is not an easy matter. So much depends on the scope of the project, exact technology and scale, numbers ordered, suppliers selected, bundled warranties; the ruling market conditions, commodity prices, supply chain bottlenecks; and the ability of the developer to manage costs. This is especially so for the less proven technologies such as nuclear third generation pressurised water reactors, offshore wind and coal/gas plants fitted with carbon capture and storage. The main challenge for these less mature technologies is to understand the extent of the first of a kind premium and a large part of this depends on the responsiveness of the supply chains. More generally, uncertainty derives from the commodity prices for fuels and carbon, while performance variations play a secondary role. All this means that any assessment of levelised costs is subject to large bands of uncertainty which implies that the relative ranking of different technologies can shift markedly.


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UK electricity generation costs update


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