Expense of nuclear and renewable alternatives: EIR release

Information requested

At FMQs on At FMQs on 20th June 2024, John Swinney said this:

“Evidence shows that new nuclear is more expensive than renewable alternatives.” The Contracts for Difference (CfD) Allocation Round 6 core parameters are availablehere: https://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-6coreparameters 

They demonstrate that numerous renewable technologies which the Scottish Government supports (including floating offshore wind and tidal) are more expensive than new nuclear.

Bearing this in mind, the information I am seeking is the evidence to which John Swinney was referring at FMQs on 20th June 2024. 

Response

The Contract for Difference price awarded to Hinkley Point C (£92.50 per MWh) is higher than the strike prices set for solar, and onshore and offshore wind in the March 2024 allocation round, at £61, £64, and £73 per MWh (in 2012 prices) respectively. This data has been retrieved from: Contracts for Difference (CfD): Allocation Round 6 - GOV.UK (www.gov.uk)

Statistics published by the UK Government provide details on the levelised costs for electricity generation technologies. A levelised cost is the average cost of the lifetime of the plant per MWh of electricity generated. They reflect the cost of building, operating, and decommissioning a generic plant for each technology.

The below figures are central cost estimates for projects commissioning in 2025 (in real 2021 prices), and can be retrieved from the following Department for Energy Security and Net Zero (DESNZ) publication: Electricity generation costs 2023 - GOV.UK (www.gov.uk).

New nuclear: £109/MWh[1]
Offshore Wind: £44/MWh
Onshore Wind: £38/MWh
Large-scale Solar: £41/MWh

As noted in the publication, for nuclear, DESNZ continues to use the cost assumptions from the 2016 ‘Electricity Generation Costs’[2] report. To enable comparison with the levelised costs of other technologies, the central cost estimate for new nuclear in the 2016 report has been uprated to 2021 values using His Majesty’s Treasury (HMT) GDP deflators.

[1] As per the source publication (linked below), the estimate for new nuclear assumes ‘First of a Kind’ costs.
[2] BEIS_Electricity_Generation_Cost_Report.pdf (publishing.service.gov.uk)

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