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Levelised Costs Of UK Electricity Generation

November 24, 2016

By Paul Homewood 




The BEIS has just published its analysis of levelised costs for different types of electricity generation.

This compares costs per MWh for different technologies on the basis of new build.

So, for instance, the table below costs projects theoretically commissioning in 2020.





At first sight onshore wind appears to be the cheapest, but there is a catch!


As I have been pointing out for some time, these costings always include carbon costs in the calculation for CCGT, as the BEIS paper shows on the very next page:




So although CCGT works out at £66/MWh, the true cost, ignoring the totally artificial imposition of a carbon tax, is really £47/MWh. This is much less than wind or solar.

Even under the high capex/fuel scenario, the cost would still only be £57/MWh.


And as the paper points out, no allowance is made for other costs incurred because of renewable energy, such as standby capacity and extra grid infrastructure.




Renewable lobby groups are continually allowed to get away with the claim that onshore wind and solar are the cheapest generating options.  

Will the media finally wake up, do its job and challenge these lies whenever they are made?

  1. November 24, 2016 8:12 pm

    Paul as usual right on with the correct analysis. Will the press tell the truth. I think not and I don’t expect Business and Energy Secretary Clark or Environment Minister Ledsome to tell it either. Maybe Donald will, he is the only one with the courage.

    • A C Osborn permalink
      November 24, 2016 9:06 pm

      There are a few Reporters around who would report this, Chris Booker is one and Emily Goodsen is another.

  2. martinbrumby permalink
    November 24, 2016 8:14 pm

    Don’t pussy foot around.
    This BEIS paper, even at first glance, is tendentious shit.
    The people who produced it should be sacked for gross incompetence / fraud.
    Where are to costs of connection to the grid and for rectification? Where are the costs for back-up supply when the sun doesn’t shine and the wind doesn’t blow?

    • CheshireRed permalink
      November 24, 2016 8:44 pm

      Exactly. If we’re being completely honest the ENTIRE cost of back-up would also fall in the renewables cost column. Without back-up from stuff that actually works renewables simply wouldn’t be fir for purpose, so they’re an integral component of the deal and should be costed as such. What a disaster they’ve been. 😦

    • Athelstan permalink
      November 25, 2016 9:39 am

      Disconnected, civil servants of green, are disconnected and disconnection only begets darkness.

      I’m sick of the lies, they’re not even clever lies. All it is, just discombobulation posing as totally bogus statistics. In conclusion looking at the over view, you’ve got to say it, logically drawing, evaluating from this sort of guff – and this type of idiot calculating in government, across the administration, is the norm – is it not?

      Then, the country is doomed through and with and in encouragement of woefully incompetent pen pushers, but what does that say of our ‘leaders’ – the blind leading the blind.

  3. bushwalker permalink
    November 24, 2016 8:46 pm

    I’ve downloaded the BEIS paper to have a read, but upfront I’d be sceptical. How do you compare generating plant which is only operational about 33% of the time and which has very little to offer in terms of economies with scale with CCGT’s and OCGT’s. Also I’d be looking at internal rates of return over a common time period, not GBP/MWh.

  4. November 24, 2016 9:18 pm

    So DECC goons have retreated into a larger nearby BEIS encampment.

    It is long past time that the authors of fraudulent garbage like this were named.

    I see the geniuses at DECC / BEIS have doled out our money to a fleet of consultancies sine they are too dim to work the shell game themselves/

    Just disgraceful tosh that’s cost a lot of our money.

    115 mentions of CCS !

    They are on hallucinogens.

  5. Genghis permalink
    November 24, 2016 11:14 pm

    In addition to the artificial carbon fees, ignoring the huge cost for backup generation when the sun does not shine or the wind does not blow and the extra transmission costs, as noted in the above post, there is more. In the report it is noted that land costs were not included. These cost make coal and natural gas generation much more cost effective. Also, in the report one finds that different hurdle rates and discount rates were used for different technologies. But, in my quick review I could not find the specific rates used in the top level summary chart. So one does not know if they are reasonable or biased to promote “renewable” energy.

  6. AndyG55 permalink
    November 25, 2016 5:38 am

    Are the wind and solar “installed nameplate” values?

  7. Shooter permalink
    November 25, 2016 6:53 am

    I have one for Ontario. This graph caught my attention from a Greenie who asserted the usual about renewables. His comment was thus:

    “I don’t think you answered my question.

    Regardless, while the capacity for gas may have increased, that doesn’t mean that usage has. The power generated from mid-2015 to mid-2016 has actually dropped every quarter, from 4.6 TWh to 2.3 TWh.

    And when you look at the hour-by-hour supply data from IESO, there is no correlation at all between gas and wind generation. Gas is not used to compensate for low wind generation.

    In fact, according to the IESO, “While their output is variable, these facilities [Wind and Solar] act as baseload supply, meeting core energy demand needs.”

    For example, IESO notes the appropriateness of solar this way, “.. with solar generation, in particular, working to reduce summer peaks when air conditioning use is at its highest”

    In fact, it is wind that is used to compensate for changes in demand, not gas.

    Again from the IESO, “For that reason, the IESO instituted a dispatch process for both solar and wind facilities connected to the grid and they are now called upon to decrease or increase their output depending on system conditions.”

    The importance of wind is further noted, “Eighteen nuclear shutdowns were avoided as a result of wind dispatch capabilities in 2014. In these instances, the wind dispatch allowed system operators to reduce energy output to address short-term SBG concerns, avoiding more costly and lengthier nuclear shutdowns.”

    In my view, Ontario could eliminate fossil fuels entirely by tripping their wind and solar capacity, using Hydro and Import capabilities to compensate for any periods of low production.”

    Yet the detailed PDF I could find on the whole debacle was that solar and wind, though heavily subsidized and contracted, produced a meager 200 Mwh on peak days. Yet nuclear and natural gas produced ten times that with a single plant in a single day. That PDF is here:

    Click to access Progress-Report-Contracted-Supply-Q12016.pdf

    From the Canadian perspective.

  8. tom0mason permalink
    November 25, 2016 7:58 am

    The big cost they are not addressing is that as you increase wind power, conventional power (from coal, oil, nuclear) will spend an increasing amount of time and effort trying to stabilize the grid.
    When wind generation (actual) gets much over half of the grid capacity then, at times, a large majority of conventional powers capability is spent trying to stabilize the grid and not supplying the customer. The relationship is not linear being as it is, customer load and weather dependent.
    One of the major problems is that advocates of wind rely on highly averaged figures for performance data of wind power. Which is fine if you can live with your power being available ‘on average’. The problem is most customers would like the power to be there at the touch of a switch and not just ‘on average’.

    Other cost not seen are the infrastructure upgrade — apart form all the extra grid cable connections and circuit breakers, there is the vast digital IT communication network that has to be installed to keep control of this increasingly dynamic system.

    Has this move made electrical energy more reliable? — No.
    Has this new technology made the grid system more secure? — No.
    Has it made supplies more stable? — N0.
    Has it made the supply better able to react to customer demand — No.

    So, tell me again, what is so good about ‘green’ energy apart from fulfilling a political pledge honoring the myth of CO2 causing global warming?

    • Gerry, England permalink
      November 25, 2016 1:54 pm

      Has it made our electricity cheaper? – No
      Has it helped make our heavy industry more competitive? – No
      Has it brought greater employment? – No
      Has it changed the planet in anyway? – No

    • Roy permalink
      November 25, 2016 3:11 pm

      Excellent point Tom, and well made. I worked for the CEGB in the early 80s and although a computer operator I became fascinated by the national grid. I had the opportunity to visit one of the two main control centres and many power stations throughout the Midlands (all coal of course) but they could belt out the megawatts 24 hrs a day come rain or shine (although the miners’ strike caused a few headaches!) How simple yet ingenious the system was back then – and so much more reliable and resilient. It’s sad to see what it’s become.

  9. richard verney permalink
    November 25, 2016 7:58 am

    What are the pre-development costs? What do these consist of, and how are they calculated?

    Why are there no pre-development costs for wind and solar?

    Can anyone provide an answe?

    • November 25, 2016 10:23 am

      The key color coding is a bit misleading, Richard.

      If you go to Page 36 of the BEIS report, it shows that there are pre dev costs for wind and solar, but none for CCGT.

      I would guess that seabed surveys, etc would be a typical cost for offshore wind.

  10. NeilC permalink
    November 25, 2016 9:03 am

    I have recorded 154 random readings from Gridwatch over the last 2 years, backed up by screen shots.

    CCGT 39.05%
    Coal 21.18%
    Nuclear 20.22%
    Wind 5.46% (Max 6.57GW)
    Solar 0.23% (only reported since NOv 2016)

    Green 12.03% Fossil+Nuclear 86.55%

    These people live in cuckoo land when it comes to pricing and fairyland when it comes to giving us efficient cheap electricity.

  11. Harry Passfield permalink
    November 25, 2016 9:09 am

    This is typical. I bet the report’s conclusions were decided on before it was written – and then it is written to satisfy them.

  12. tom0mason permalink
    November 25, 2016 9:57 am

    The Old Efficient Scheme —

    customer demand = total generated power + losses, no more no less.
    Amount of fuel burned has a direct impact on the cost to the customer.
    Expand the number of customer for national coverage and reliability.
    Generator and grid system to be made robust, surviving most bad weather.
    Generator and grid system to be made secure by physical measures.
    Customers’ demand always dictates how much power is required.

    <b.The Aims of the New Green Scheme —

    Make consumers an optional grid connection.
    Total generated power = controlled customer demand, or less.
    Amount of fuel burned is minimized to that required to keep the grid stable, customers are billed for it even they get less of the conventional power generated.

    Generator and grid system to be made fragile, collapsing during most poor weather events.

    What is generated is assigned to the customers via a smart meters’ interface to the smart grid.

    Customers pay for the digital network required to maintain a local feed to them. They also pay for the nation grid system upgrade and maintenance, and another digital network for grid and generator communications, to make unreliables work on the grid.

    Make the grid and generator system less secure by having little overall digital security policy for networks, digital hubs, or major communication facilities and exchanges.

    Customers to pay all costs for maintaining unreliable generators.

    Reduce number of customers for a better fit to the generated power availability.

    Planned reduction in grid size, isolating geographically remote section of the country.

    👿 Welcome to the Green revolution — Forward with regress! :mrgreen:

  13. November 25, 2016 10:16 am

    It’s obviously a slip of some bureaucrat’s pen (not picked up by the reviewer). The carbon costs should be positive (not negative) to account for increased plant growth, and the figure would be even more positive if we had had any benefits from a warming climate, which we haven’t seen yet but I am sure they are in the pipeline.

  14. It doesn't add up... permalink
    November 25, 2016 10:30 am

    Gas price assumption is £35/MWe = 120p/therm e or 60p/therm at an inefficient 50% efficiency, or 72p/therm at a modern 60% efficiency.

    Current ICE NBP gas is about 48p/therm for Jan 2020, 40p/therm for Jun 2020, 46p/therm for Dec 2021.

    While the study was being prepared, forward gas prices were lower still. It’s not just the carbon tax that they’re using to fiddle the figures.

  15. Tom Dowter permalink
    November 25, 2016 2:47 pm

    S0 long as so-called “renewables” have first dibs for supplying demand, Any cost comparisons tend to favour them.

  16. Reasonable Skeptic permalink
    November 25, 2016 5:23 pm

    You can pretty much get any response you want by having like minded groups producing, analysing and reporting data.

    In this case, the data producers had to include “cost of carbon” to allow analysts to get the numbers that the media need to produce.

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