Energy: Costs
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the effectiveness of the levelised cost of energy for communicating the true cost of energy production to consumers.
Answered by Michael Shanks
The Levelised Cost of Electricity (LCOE) provides a simple, high-level metric to compare the cost of building and operating different generation technologies. While valuable for comparing the relative cost of technologies to each other, LCOE does not include wider system impacts such as flexibility, integration, or transmission costs which occur within an operational system. To fully capture these factors and assess the true cost to consumers, the Department and the independent National Energy System Operator (NESO) use detailed power sector modelling.
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