The 2050 Calculator estimates the cost of the whole energy system to the UK economy between 2010 and 2050. This includes the capital and operating costs of all technologies that produce, transmit, convert, consume and save energy and the cost of the fuel used. For example, this includes the cost of:
- building and operating our electricity generation system
- building and maintaining the UK’s cars, buses, trains and planes
- building, installing and maintaining the UK’s domestic boilers, district heating systems and other heating systems
- energy efficiency enhancements to our buildings (such as cavity wall insulation)
- energy and carbon saving technologies fitted in the heavy industry sector (such as steel and cement production)
- all gas, coal, oil and bioenergy consumed in our homes, businesses and transport
- fuel production costs (such as oil refinery processes, cost of converting waste to bioenergy, etc).
How we calculated the total energy system cost in 2010
Using point estimates, the raw Calculator data suggests a total energy system cost of ~£170bn. However, this total omits the financing costs associated with existing infrastructure (i.e. repayments on power stations, cars, heating systems and so on, bought before 2010). Based on the point estimate financing assumptions (7% pa interest loans with a 15 year repayment period), the finance costs for purchases made since 1995 therefore need to be added to provide a truer estimate. Based on financing costs in the five year period to 2010 equalling ~£30bn, we have added this figure twice to the total to account for repayments on assets purchased over the previous two five-year periods. This gives a total energy system cost in 2010 of £230bn.
To calculate the per person per year figure of £3,700, we have divided the total system cost by the UK’s population in 2010.