This is one conclusion of a set of figures published by DECC and highlighted this week in a parliamentary answer by Charles Hendry.
The tables below are taken from Mott Macdonald (2010) and give levelised cost estimates (average lifetime generation cost per megawatt-hour) for new build plants in the main large-scale electricity generation technologies in the UK, at current engineering, procurement and construction (EPC) contract prices.
Mott MacDonald comment that the CHP options reveal the lowest cost power by far, at only £24.9/MWh, one third the cost of a gas powered plant, once the steam revenues are factored in.
Assumptions include that the projects are able to secure a 100% use for their steam over the whole plant life, which may not always be possible, unless companies/councils are using the heat for their own premises. Another assumption is that carbon prices will continue to increase.
The biomass-fired schemes, which have much higher heat-to-power ratios, have the lowest net costs, even seeing negative costs in the medium to long term - i.e., they could make money for the developer.
Even if the biomass CHP schemes can capture only half of the projected steam credit, the costs would still be less than £70/MWh in 2020.
The table reveals other interesting aspects the cost of some renewables, nuclear, and carbon capture and storage:
• offshore wind power is the most expensive form of power at £190/MWh for Round 3 of the bids
• integrating CCS (carbon capture and storage) into coal or gas fired plant would substantially raise capital and operating costs.
• the leading 3rd generation nuclear designs, although projected to incur a significant first build premium, have a lower levelised cost at £99/MWh than an Advanced Super Critical (ASC) coal plant without CCS, but still significantly higher than Combined Cycle Gas Turbine (CCGT).
• anaerobic digestion is not as cost effective as normally assumed
• landfill gas and sewage gas are much more cost-effective than energy from waste.
Under DECC’s central carbon price projection, the premium for CCS versus un-scrubbed plants is £32-38/MWh, although the carbon costs on the un-scrubbed coal and gas plants is £40/MWh and £15/MWh, respectively.
In the longer term, as these technologies bring costs down from experience, the levelised costs of CCS equipped plant will undercut those for the un-scrubbed plant.
Even then, the CCS equipped plants still see levelised costs of £105-115/MWh with gas at the lower end, and coal at the upper end of the range. Adopting DECC’s low carbon price projection would see the CCS equipped plant continuing to be more expensive than a non-equipped plant through the 2020s.
The tables
It should be noted that for the purposes of presentation, the table only gives either 'FOAK' (first-of-a-kind) prices or 'NOAK' (nth-of-a-kind) prices for each technology. On offshore wind, for example, it shows offshore wind 'FOAK' prices, whereas the round 2 technology may be considered to have progressed towards 'NOAK' prices. Mott Macdonald estimate 'NOAK' offshore wind costs at £125/MWh (10% discount rate, 2009 project start at today's EPC prices).
| Case 1: 10% discount rate, 2009 project start at today's EPC prices, with mixed FOAK/NOAK | ||||||||||
| Levelised cost | Gas CC GT | Gas CCGT with CCS FOAK | ASC coal | ASC c oal with CCS FOAK | Coal IGCC FOAK | Coal IGCC with CCS FOAK | Onshore wind | Offshore wind FOAK | Offshore wind R3 FOAK | Nuclear PWR. FOAK |
| Capital Costs | 12.4 | 29.8 | 33.4 | 74.1 | 61.7 | 82.0 | 79.2 | 124.1 | 144.6 | 77.3 |
| Fixed operating Coals | 3.7 | 7.7 | 8.6 | 18.6 | 9.7 | 17.7 | 14.6 | 36.7 | 45.8 | 12.25 |
| Variable Operating Costs | 2.3 | 3.6 | 2.2 | 4.7 | 3.4 | 4.6 | __ | __ | __ | 2.1 |
| Fuel Costs | 46.9 | 65.0. | 19.9 | 28.7 | 20.3 | 28.3 | __ | __ | __ | 5.3 |
| Carbon Costs | 15.1 | 2.1 | 40.3 | 6.5 | 39.6 | 5.5 | __ | __ | __ | __ |
| Decomm and waste fund | __ | __ | __ | __ | __ | __ | __ | __ | __ | 2.1 |
| CO2 transport and storage | __ | 4.3 | __ | 9.6 | __ | 9.5 | __ | __ | __ | __ |
| Steam Revenue | __ | __ | __ | __ | __ | __ | __ | __ | __ | __ |
| Total levelised cost | 80.3 | 112.5 | 104.5 | 142.1 | 134.6 | 147.6 | 93.9 | 160.9 | 190.5. | 99.0 |
| Case 1: 10% discount rate, 2009 project start at today's EPC prices, with mixed FOAK/NOAK | |||||||
| Levelised Cost | Small business power only. FOAK | Large biomass power only. FOAK | OCGT | AD on waste | Landfill gas | Sewage gas | Small biomass CHP. FOAK |
| Capital Costs | 55.8 | 46.1 | 7.1 | 63.8 | 25.8 | 42.0 | 91.3 |
| Fixed operating Coals | 21.0 | 13.4 | 3.0 | 21.0 | 13.1 | 8.9 | 23.9 |
| Variable Operating Costs | 2.5 | 2.5 | 1.5 | 18.6 | 21.1 | 2.1 | 2.8 |
| Fuel Costs | 36.7 | 31.2 | 60.6 | __ | __ | __ | 54.9 |
| Carbon Costs | __ | __ | 18.2 | __ | __ | __ | __ |
| Decomm and waste fund | __ | __ | __ | __ | __ | __ | __ |
| CO2 transport and storage | __ | __ | __ | __ | __ | __ | __ |
| Steam Revenue | __ | __ | __ | __ | __ | __ | 148.5 |
| Total levelised cost | 116.0 | 93.2 | 90.5 | 103.3 | 60.0 | 54.0 | 172.9 |
| Net levelised cost | __ | __ | __ | __ | __ | __ | 24.4 |
| Levelised Cost | Large biomass CHP. FOAK | 10MW gas. CHP | Small GT based CHP | CCGT. CHP | Energy from waste | Hydro reservoir |
| Capital Costs | 86.8 | 17.2 | 15.1 | 14.3 | 94.9 | 74.2 |
| Fixed operating Coals | 22.0 | 4.8 | 4.3 | 5.0 | 15.2 | 9.0 |
| Variable Operating Costs | 2.4 | 2.4 | 2.4 | 1.9 | 56.7 | - |
| Fuel Costs | 48.7 | 83.4 | 76.8 | 57.1 | - | - |
| Carbon Costs | - | 25.5 | 23.5 | 18.5 | - | - |
| Decomm and waste fund | - | - | - | - | - | - |
| CO2 transport and storage | - | - | - | - | - | - |
| Steam Revenue | 135.0 | 56.6 | 45.2 | 27.2 | - | - |
| Total levelised cost | 160.0 | 133.4 | 122.1 | 96.7 | 166.8 | 83.2 |
| Net levelised cost | 24.9 | 76.8 | 76.8 | 69.4 | - | - |
Good post, very informative.
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