Its estimates of the levelised cost of energy (LCOE) for large-scale solar, onshore wind and offshore wind have all fallen significantly since they were last calculated in 2013.
The Department’s central projection for the LCOE for large-scale solar commissioned in 2020 dropped from £92/MWh to £67/MWh. For those commissioned in 2030 it decreased from £69/MWh to £60/MWh.
For onshore wind projects with a capacity of more than 5MW it declined from £85/MWh to £63/MWh in 2020 and from £82/MWh to £60/MWh in 2030. For offshore wind the figures plummeted from £136/MWh to £106/MWh in 2020 and from £120/MWh to £96/MWh in 2030.
BEIS also revealed revised figures for non-renewable generation. Its central projection foresees the LCOE for an H-Class combined cycle gas turbine (CCGT) reaching £66/MWh by 2020 and £99/MWh by 2030. The equivalent figures for a 600MW open cycle gas turbine (OCGT) running 500 hours each year are £189/MWh and £214/MWh.
The LCOE for a first-of-a-kind (FOAK) pressurised water reactor (PWR) commissioned in 2025 was estimated to be £95/MWh, falling to £78/MWh for an Nth-of-a-kind (NOAK) PWR commissioned five years later. The LCOE for a FOAK carbon capture and storage (CCS) enabled CCGT plant was projected to be around £110/MWh.
BEIS estimates of the levelised cost of energy (LCOE) for various technologies
Source: BEIS
The levelised cost of energy is the ratio of the total costs of a generic plant – both up front and operating costs, including carbon costs – to the total amount of electricity expected to be generated over its lifetime. Both inputs to the calculation are expressed in ‘net present value’ terms, meaning that future costs and outputs are discounted when compared to costs and outputs today.
It does not take account of wider costs that fall to parties other than the generator, such as system balancing and network reinforcement costs. It is also based on a number of assumptions, most importantly about the plant’s load factors and fuel costs. For this reason BEIS provided a range of estimates for each technology.
Although the Department’s modelling of the electricity market does not make use of the figures per se, it does make use of the assumptions used to calculate them.