Value chain · CLM-1428
In plain terms
Britain's grid operator estimated that the cheaper of its two plans for a clean power grid in 2030 would cost about 126 pounds for each megawatt-hour used, in 2024 money, a little more than a plan that misses the climate targets, though NESO calls the costs of all the options similar within the bounds of uncertainty. It counts the capital cost of new plant and grid built since 2023, plus running, fuel and carbon costs, but not the capital cost of plant already built.
The claim as recorded
NESO estimated annuitised 2030 Great Britain power system costs per useful unit of electricity of GBP 126/MWh for its New Dispatch clean power pathway (sensitivity range 120 to 143), GBP 133/MWh for its Further Flex and Renewables pathway (125 to 147) and GBP 118/MWh for a Counterfactual that falls short of the carbon targets (109 to 155), in a 2024 price base. The New Dispatch total is made up of capacity capex and opex 81, network capex and opex 17, fuel 14, constraints 10 and carbon 6, less 2 for net imports and exports.
Evidence behind this: T3: the GB system operator's advice to government, with its cost method in a published annex (SRC-786).
Scope and limits
Great Britain, 2030 only. A whole-system average over all technologies: Figure 20 splits costs into capacity, network, constraints, carbon, fuel and net trade, not by technology, so it gives no firming cost for wind or solar. Only new-build capex since 2023 is counted, and NESO says the pathway costs are not directly comparable to costs of the current system (SRC-786 p.13), so 126 is not the full cost of the 2030 system. SRC-786 defines the denominator two ways, useful energy as consumer load plus electrolysis (p.10) and total generation adjusted for battery round-trip losses (p.13), and does not reconcile them on the page. The merit order effect markers are payment changes shown beside the bars, not part of the totals. NESO says costs are similar across all options within the bounds of uncertainty, and that once the merit order effect is counted the Counterfactual has no material cost advantage unless gas or carbon prices are materially lower (SRC-785 p.77); the Counterfactual range of 109 to 155 spans the New Dispatch total. Capacity costs cover the annualised investment cost of new generating and storage capacity and its operation and maintenance, not fuel or emissions costs (SRC-785 p.74). Onshore enablers are excluded (SRC-786 p.12), and decommissioning costs are counted for nuclear only (SRC-786 p.8). The legal notice calls the report's contents illustrative only (SRC-785 p.84, PDF p.83). 2024 prices. Not additive with, and not on the same basis as, CLM-1419 to CLM-1427.
What it assumes
Gas price around 100 pence/therm and carbon price GBP 147/tCO2 including a GBP 25/t UK underpin (SRC-785 p.75, footnote 11); generation capex annuitised with technology-specific WACC (DESNZ hurdle rates) and lifetimes; transmission capex annuitised at a 4.06% WACC under the Ofgem RIIO-3 method (SRC-786 p.8 to 9); network covers transmission, offshore, distribution, CO2 transport and storage and hydrogen infrastructure (SRC-786 p.13); modelling with PLEXOS and support from Baringa (SRC-786 p.3).
Where it comes from
p.78 (PDF p.78), Figure 20 read at a zoom 4.5 render: "Figure 20: 2030 Annuitised system costs per useful unit of electricity with sensitivities"; totals Counterfactual 118, New Dispatch 126, Further Flex and Renewables 133 (GBP/MWh); min and max sensitivity 109 and 155, 120 and 143, 125 and 147; New Dispatch bar: Capacity (CAPEX & OPEX) 81, Constraints 10, Network (CAPEX & OPEX) 17, Carbon 6, Fuel 14, Net import/export -2; merit order effect markers of -4, -9 and -10 shown beside the bars. SRC-785 p.75 (PDF p.75, render), footnote 11: "All the cost and price estimates in this report are in a 2024 price base, stripping out the effects of inflation." SRC-786 p.10 (PDF p.10, render): "where useful energy is the consumer load plus electrolysis." SRC-786 p.13 (PDF p.13, render): the unit cost divides each cost component "by the total generation, adjusted for round trip efficiency losses from batteries."; "These pathway costs can be compared against each other for 2030, but are not directly comparable to cost estimates for the current system (for example, as only CAPEX for new build capacity is included)." SRC-786 p.12: annuitised capex "accounts for the additional investment needed in 2030 compared to 2023."; "Onshore enablers were not included in the analysis due to challenges in obtaining relevant data."
Basis: GBP per MWh of useful electricity, 2030, annuitised; SRC-785 p.75, footnote 11: "2024 price base, stripping out the effects of inflation"; SRC-786 p.12: "real 2024 terms".
Related records
- Answers question
- QST-021 not published in this release
Cite this
energyaperture.com/c/clm-1428
CLM-1428, Energy Aperture, as of 2024-11.