<p>The Department has a strong focus on incentivising reductions in the cost of renewable technologies.</p><p>The level of support awarded under the renewables obligation and contracts for difference has been set based on the best available evidence on costs of renewable technologies in the UK; and at a level that remains within the budgetary constraints set through the Levy Control Framework (LCF).</p><p>DECC publishes levelised costs estimates of various generation technologies. The levelised cost of a particular generation technology is the ratio of the total costs of a generic plant to the total amount of electricity expected to be generated over the plant's lifetime (per megawatt hour). The latest published figures are available:</p><p>https://www.gov.uk/government/publications/electricity-generation-costs-december-2013</p><p>The figures in the report show that the levelised cost of onshore wind and offshore wind are expected to fall over time. This is reflected in the support levels that we offer under renewables obligation, which were reduced by 10% for onshore wind in April 2013. DECC undertook a call for evidence on onshore wind costs in 2013 which concluded that this reduced support rate remained appropriate.</p><p>These cost reductions are also reflected in the strike prices for these technologies in the EMR Delivery Plan, which shows support falling for a number of technologies over the coming years. Under the CfD, it is our intention that established technologies (such as onshore wind) will have to compete on price in an auction in order to secure a contract for support. This means that only the most cost-effective projects will be built and will represent better value for money for bill-payers, while continuing to deliver the investment we need in secure, low-carbon electricity generation.</p>