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Fully competitive: The considerable uncertainty now associated with the market price of fossil fuels is reflected above in the large range of costs now applicable to electricity generation from coal and gas-fired plant. The range for nuclear, as always, reflects the spread of cost estimates provided by the nuclear industry for what it believes it can build reactors for.

For wind power, the range in generation cost is a reflection of wind speed at any particular site and actual costs reported in 2008 for fully installed wind farms at the top and bottom ends of the price range. The offshore curve also reflects actual costs quoted last year.

At a typical cost for coal and gas generation of EUR 70/MWh (red line above), wind power at the lower end of the installed cost range comes in cheaper at sites with annual average wind speeds of 7.5 m/s or more. More expensive wind plant, usually built where wind speeds are higher, are also fully competitive from wind speeds of 8.5 m/s. As yet, the cost of offshore wind power can only measure up to coal.

For all the generation options above, an 8% interest rate is assumed for the entire cost of financing both the debt and the equity over 20 years.