News & insights
Date: October 2025 | Client: DESNZ | Sector: Energy | Energy infrastructure | Energy markets | Expertise: Regulatory Finance
DESNZ publishes CEPA report on hurdle rates for electricity generation technologies
The UK Department for Energy Security and Net Zero (DESNZ) commissioned CEPA to undertake this research covering updates to the hurdle rate assumptions for the following technologies:
- renewable generation;
- other low carbon generation
- thermal generation (both with and without Carbon Capture Use and Storage, or CCUS);
- storage technologies;
- interconnectors;
- hydrogen electrolysers; and
- demand response.
CEPA conducted qualitative risk assessment, created CAPM-based estimates, undertook an investor survey and considered other cross-checks.
The evidence informs DESNZ's cost estimates and technical assumptions, Administrative Strike Prices (ASP) analysis for the Contracts for Difference (CfD) renewables deployment scheme and power sector modelling.
The CEPA report is availabe here.
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