The final report of the ReCosting Energy project was launched earlier this month.
The project has carried out a wide-ranging review into how the UK’s energy system will need to evolve to face the challenges of Net Zero.
Frontier Economics supported the project by estimating the Whole Electricity System Cost (WESC) of different generation and demand-side technologies. Traditionally, costs of generation have been compared using the Levelised Cost of Electricity, which calculates the cost of building and running a power plant per MWh of electricity produced. However levelised costs ignore important distinctions between generation technologies, such as their flexibility or reliability. The WESC metric was developed by Frontier for BEIS (formerly DECC) to capture the wider costs and benefits of generation technologies. Frontier, together with our partners LCP, previously produced a range of WESC estimates for the Energy Technologies Institute.
Our work for the ReCosting Energy project has extended this technique to cover demand-side technologies (demand-side response, energy efficiency, and storage). The work shows how these technologies can be compared alongside generation technologies, and have the potential to provide better value for money – particularly once benefits to local distribution networks are included. Unlocking this value will require markets which allow providers of flexibility to share in their value to the wider system. Frontier’s analysis is included as an annex on page 59 of the ReCosting Energy report.
Frontier regularly advises clients on the decarbonisation of the energy sector. For more information, please contact us on firstname.lastname@example.org or at +44 (0) 20 7031 7000.