The Rising Cost Of The Climate Change Act
By Paul Homewood
A year ago, I looked at DECC’s energy projections, and came to the conclusion that by 2030 they would add at least £15.3 billion to electricity bills. It turns out that I was not far wrong.
Tucked away in the Committee on Climate Change’s detailed workings for the Fifth Carbon Budget, I found this table, showing the cost of generation in 2030 for the No CCS scenario. (Costs are at 2014 prices)
||No CCS Option||
|Carbon capture & Storage||0||
|All CCGT at £50||380||50||19000|
Just to recap, the CCC make projections for several scenarios, the main ones being:
- High Nuclear
- High Renewables
- High CCS
All of these scenarios assume at least 4GW of CCS. Given that there is little prospect currently of commercially viable CCS being available in the next decade or so, the only realistic scenario we are given by the CCC is the “No CCS” one.
It is also the only scenario which is actually costed. Below is the capacity assumption for the No CCS scenario.
|Carbon capture & storage||0|
As you can see, the cost of this scenario is £36028 million for 2030, compared to a “current” cost of £19000 million, based on £50/MWh. In other words, changing to the power mix suggested by the CCC will cost an extra £17 billion a year by 2030.
Currently, of course, the market price is well below £50/MWh, so the extra cost is potentially even greater.
Note as well that the cost of providing standby capacity is not included.
Although it is not specifically explained, I believe that the cost of CCGT of £69/MWh assumes an increase in the carbon price from the current £18/tonne to £42/tonne.