Select Committee on Science and Technology Written Evidence



Carbon capture and storage

  The technology is not yet proven at large scale and therefore the cost range reflects the uncertainties of the cost and reliability of such developments. The cost of monitoring CO2 storage over the long term, and the maintenance of the storage sites is also not well defined at present. The legal and regulatory environment does not exist for off-shore storage of carbon dioxide and this would need to be settled before large scale investment was committed. Carbon capture and storage is only likely to be deployed if there were to be a belief in the long-term market value of avoiding carbon emissions.


  The expected cost of generation from new CCGTs is most heavily influenced by the future cost of gas and carbon dioxide emissions: the figures are based on a gas price in the range 20-40 p/therm gcv and carbon, 0-50

/tCO2. The EU ETS is at a very early stage of development and there is currently no certainty that it will exist beyond 2012, which justifies the 0

/t lower bound for investments commissioning around that date. At current gas prices of above 50p/therm, CCGTs would be more expensive than the top of the range shown.

Coal-fired plant

  We expect the cost of international coal to be less volatile than gas and so, for simplicity, have estimated the cost of conventional coal plant at a constant coal price of 1.4£/GJ ncv, but the same range of carbon prices. Conventional coal produces approximately twice as much carbon dioxide as CCGT plant per kWh.


  On-shore and off-shore wind developments will continue to be deployed provided they are supported by the Renewable Obligation and capital grants, as at present. The cost range above reflects the variability between higher cost offshore sites and those onshore, before these support mechanisms. We expect the cost of sites to increase over time as the best sites are used first, but the costs offshore of equipment and installation should reduce as more experience is gained and larger units are installed. The economics of wind power are heavily influenced by the wind resource available at particular locations. Wind is intermittent and hence not directly comparable with other large-scale generation alternatives without including the cost of either back-up capacity or energy storage. The cost of supplementing wind capacity with additional resources is not that material at the current low levels of penetration, but would increase if it were to become a more significant proportion of the total system capacity.


  The estimated cost of new nuclear developments is chiefly influenced by the uncertainties surrounding planning and regulatory processes as these affect expected capital cost, development and construction schedule and the competitiveness of the plant supply market. If the Government is able to mitigate the effect of these uncertainties promptly and effectively, then it would be feasible to commission new nuclear plant in about 10 years. The timing of new build would also be heavily influenced by price expectations in the gas and carbon markets.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 9 February 2006