Written question asked by Lord Lucas (Conservative), in the House of Lords. It was answered by Lord Marland (Conservative) on Monday, 10 January 2011.

Energy: Electricity

Question: To ask Her Majesty’s Government what forecasts they have made of (a) baseload electricity prices, and (b) consumer electricity prices, now and in 2030, taking into account grid costs, capacity payments for wind and solar energy back-up, and renewable subsidies.

Answer: On 16 December, the Government launched consultations on a package of options for reforming the electricity market. The preferred package is to have a contract for difference model for supporting low-carbon generation in combination with a targeted capacity mechanism, carbon price support and an emissions performance standard. For this preferred package: (a) the average wholesale electricity price is assumed to be £57/MWh in 2010 and £97/MWh in 2030 (in real 2009 prices). The increase reflects a number of factors including policy impacts and external factors such as rising fossil fuel and carbon prices; and (b) the average domestic retail electricity price (including VAT) is estimated to be £118/MWh in 2010 and £178/MWh in 2030 (in real 2009 prices). For non-domestic consumers, the average retail electricity price is estimated to be £86/MWh in 2010 and £143/MWh in 2030 (in real 2009 prices). As set out in the impact assessment accompanying the consultation, the percentage increase in electricity bills for domestic and non-domestic consumers, between now and 2030, will be lower than the increase in electricity prices due to the impact of energy efficiency policies over time.

Secondary information