To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the Answer of 4 November 2016 to Question 50624, what the reason is for the discrepancy between figures given for the cost of onshore wind in the 2020s in his Department's Hinkley Point C Value for Money Assessment, published on 29 September 2016, with a cost of £49-90/MWh and Electricity Generation Costs report, published on 9 November 2016, with costs of £47-76/MWh in 2020 and £46-74/MWh in 2025.
16 December 2016
The Electricity Generation Cost report outlines the ‘levelised cost’ of onshore wind. The levelised cost is a guide to the overall costs for the lifetime of an onshore wind project; by contrast, the cost estimates in the Hinkley Point C value for money assessment are ‘Strike Price Comparators’ which are not equivalent to levelised cost.
In the value for money assessment, to make the levelised cost more comparable to the HPC Strike Price under the CfD contract, several adjustments were made: these included accounting for the lost generation from the transmission system, the cost of land and the relative difference in system balancing costs of onshore wind compared to nuclear. In addition, the running hours of onshore wind have been taken from a specific scenario where onshore wind was pursued in the absence of the HPC project.