The government has published a consultation on the phase-out of unabated coal-fired plants by 2025. This consultation was one of several announcements relating to clean energy last week, providing investors with some clarity following over a year of policy uncertainty. Secretary of State Greg Clarke said, “My priority is to ensure that our country has the electricity it needs to meet all of our needs, at the lowest possible cost and to ensure that we decarbonise our energy supplies.”
The UK is committed to meeting stringent carbon reduction targets under both domestic legislation and international agreements. Because coal emits twice the level of carbon than gas for each kWh of electricity generated, its phase-out is an important element in meeting these targets. In addition, coal emits high levels of other key air pollutants, which are also regulated.
Coal-fired generation has declined in recent years as a combination of emission limits and carbon taxes have made coal plants uneconomic to run. Support mechanisms for renewables and an increase in gas supply have also contributed to coal becoming less competitive. Power output from coal has fallen from 30% of the generating mix in 2014 to 22% in 2015 and now stands at approximately 15% of all power generated. Drax power station has taken the step of converting two of its six units to biomass and is currently adapting a third as a means of adjusting to market conditions.
The current outlook suggests that the remaining coal-fired plants will have closed by 2021 in any case. However, the government wants to act and regulate the closure of unabated coal plants in case the price of coal falls very low and changes their viability.
The emissions level of an abated power plant must be at or below that of a newly constructed gas-fired power station. This would require the deployment of CCS technology which is problematic and unlikely to be viable for the ageing plants currently in place.
The consultation provides a clear signal on clean energy in the same week that the Treasury announced a budget of £580 million to support low-carbon technologies to be allocated to two auctions. The first of these will be held in April 2017 and will support less-established technologies such as offshore wind and Anaerobic Digestion (with or without CHP).
