Energy News

Government Could Close Coal-fired Plants by 2023

           Energy News
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The UK government is considering whether to announce the closure off all of its 12 coal-fired power plants by 2023 as a commitment ahead of the UN Climate Change talks, which commence in Paris on 30th November. Plants fitted with carbon capture and storage (CCS) would be exempt and therefore large coal plants will be forced to decide whether to convert to biomass or fit CCS equipment.

Coal-fired plants are already subject to strict nitrogen oxide (NOx) and sulphur oxide (SOx) emissions limits from 2016. Under the EU Industrial Emissions Directive, coal generators that don’t install equipment to reduce their NOx and SOx will have to reduce their operating hours, although compliance can be introduced in stages under a UK transition plan.

A mix of existing policy measures has resulted in three power stations announcing their intended closure from March 2016, at Eggborough, Ferrybridge, and Longannet. These power stations have a combined capacity of 5.3GW and there is concern that new sources of generation will not be in place in time to replace the closure of these and further plants.

Drax power station is taking a staged approach to converting its whole plant to a biomass-fuelled generator. It was also one of three companies that formed the consortium Capture Power Ltd which will be bidding for the £1 billion of capital funding under the CCS commercialisation competition for the White Rose CCS Scheme. This scheme would capture 90% of CO2 from a new power station at Drax and store it beneath the North Sea. It is one of two schemes shortlisted for the final stage of the competition’s bidding process, the other being the Peterhead project. They have already been awarded funding to carry out the engineering and design studies and in addition have been awarded €300 million under the EU’s new entrant reserve. The final investment decisions will be made in late 2015.

But, when the government announced the removal of the Climate Change Levy (CCL) exemption for renewable energy from 1st August, it reduced the flow of income to Drax. The power station had benefited from the exemption as the result of its biomass generation. In turn, this reduction in income reduced Drax’s share value and left it unable to invest further in the White Rose CCS project, although it has committed to fulfil the feasibility and technology development stage. The remaining investors have since underlined their commitment to the project.

Statistics show that in Q2 2015, the proportion of the UK generating mix met by coal generation reduced to 20.5%, compared to 28.2% at the same time last year. Meanwhile, renewables made up 25% of generation as the result of high levels of wind and sun, combined with an increase in installed renewable capacity in solar, wind, and biomass. However, while this is good progress for renewables, further investment in lowcarbon energy sources will be required in order to replace retiring plants in order to meet requirements, particularly at times of peak winter demand. At the moment, slow progress is being made on both new nuclear plants and CCS.

Reports that DECC will make an announcement regarding the closure of UK’s coal-fired plants by 2023 were made in the press last week, but discussions are still ongoing. DECC has not made any announcement other than to say: “A number of coal power stations have closed in recent years and we expect this trend to continue. The Government is focusing on stimulating investment in lower carbon alternatives.” The Government will be under pressure to show their commitment to carbon reduction targets in the lead-up to the Paris climate conference.

Written By- Nikki Wilson


Alfa Energy Group

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