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Paragraph 5 Method of calculating hypothetical cost of generating certain electricity

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

In the formula in paragraphs 3 and 4 the reference price Wn shall be given by the following formula:—

Wn = FCn ×α

where—

a

  • FCn is the notional cost of fuel (calculated in pence per gigajoule) which would be consumed in generating the relevant amount of electricity if it had been generated by the generating station at Longannet in month n which is given by the following formula:—

    FCn =( CPn δn )×1001

    where—

    1. (i)

      CPn is the price (in pounds per tonne) of coal shown in the Relevant Table in relation to quarter q—2 (where “quarter q” means the calendar quarter in which month n occurs, “quarter q—1” means the quarter immediately preceding quarter q, and “quarter q—2” means the quarter immediately preceding quarter q—1); and

    2. (ii)

      δn is the average net calorific value of coal which would have been consumed in generating electricity at the generating station at Longannet in relation to quarter q—2 (where “quarter q” means the calendar quarter in which month n occurs, “quarter q—1” means the quarter immediately preceding quarter q, and “quarter q—2” means the quarter immediately preceding quarter q—1); and

    • b

  • α is the average incremental heat rate of the generating station at Longannet (calculated in net gigajoule per kWh).