Updated: BEIS reaffirms commitment to coal phase-out

The government has reaffirmed its commitment to phase out all unabated coal generation by 2025, and replace it with lower-carbon alternatives.

In a consultation document published today (9 November), the Department for Business, Energy and Industrial Strategy (BEIS) said it wants to see “an orderly transition” away from unabated coal generation.

However, it assured that “action will only be taken if there will be no risks to the security of our electricity supplies”.

In November last year, former energy secretary Amber Rudd promised to cut unabated coal-fired power from the UK generation mix by 2025 as part of her energy policy ‘reset’. Under the plans, the use of coal plants will be restricted from 2023 and shut by 2025.

BEIS has asked stakeholders for their views on how to determine whether a power station has been sufficiently abated to continue to operate.

It is also considering options for constraining the operation of coal-fired power stations in the years leading up to 2025, in order to smooth the rate of unabated coal power station closures.

The government said its primary objective is to ensure that the closure of remaining coal-fired power stations takes place in a way that minimises the impact on the electricity system and provides certainty for investors.

The consultation will close 1 February 2017. Subject to stakeholders’ views and evidence, the government said it plans to bring forward any legislative changes as soon as the timetable allows.

Coal has historically been the largest source of electricity generation in the UK, but this began to decline in the mid-1990s with the construction of new gas-fired power stations.

Graph: Contribution to net generation over the period 1990 to 2015

Source: BEIS

The number of coal power stations has also reduced. In 2012 there were 17 stations in Great Britain with a total capacity of 23GW. There are now eight either generating electricity for the wholesale market or available under the Contingency Balancing Reserve, with a total capacity of 13.9GW.

Graph: Fleet of coal power stations in Great Britain (as at July 2016)

Source: BEIS

Recent analysis from think tank Sandbag found that UK coal generation looks set to drop 66 per cent this year, meaning an 82 per cent fall between 2012 and 2016.

The group claimed this fall is entirely responsible for the 18 per cent drop in UK CO2 emissions, as over that period net emissions from other sectors are unchanged.

Here is some of the reaction to the consultation announcement:

Clear signals today of UK Govt commitment to cleaner energy . Coal closure consultation & detail on next stage of support for renewables.

— Nick Hurd MP (@nickhurdmp) November 9, 2016

Some comfort that on day US elects #climate sceptic, UK govt shows what centre-right climate leadership is: phase out #coal, do #renewables

— Amy Mount (@ASmallAMount) November 9, 2016

UK coal phase out by 2025 & annual renewable investments of £730m – proof a country can come back from a dark day https://t.co/do827agWHZ

— Camilla Born (@camillaborn) November 9, 2016

Paul Massara, chief executive, North Star Solar and former chief executive, Npower

“Energy systems are transforming faster than anyone would have thought possible just a few years ago, and the big picture question for Theresa May and UK plc is, does Britain chose to be part of the future and develop an industrial strategy around smart grids, storage and renewables or does it cling to an out-dated view of the past?

“The evidence now indicates that smart, flexible grids based on renewable electricity supplemented by demand shifting, storage and interconnection will deliver power cheaper than the old model with endless fossil fuel costs – and with far lower carbon emissions and related health issues.

“We need an affordable, secure transition to a low carbon economy but sometimes, as Tennyson said, you have to ‘ring out the old’ before you can ‘ring in the new’ – and ringing out the coal era, firmly and confidently, will speed up investment in the new energy technologies we need, so I would just urge the government to get on with it.”

Dave Cockshott, chief commercial officer, Inenco Group

“Whilst a commitment to closing coal-fired power stations within the next 10 years is an important step in the UK’s journey to meet its climate change targets, it does pose serious questions for both security of supply and the cost that UK consumers may have to bear to get us there within the given timeframe. There is currently around 10GW of coal plant in operation, helping us to meet the winter capacity requirements; it will be crucial to replace this if we are to ensure that we avoid a capacity crunch in the early 2020s.

“The capacity market has thus far failed to incentivise investment in new gas plant and a fleet of new nuclear plants is much delayed. Increasing the amount of renewables in our generation mix is extremely positive, but it creates challenges around balancing supply and demand and ensuring adequate flexibility is available on the system. This requirement could be met in the interim with diesel generators and battery storage, but at a cost to consumers.

“Government urgently needs to address its long-term policy framework. Only by bringing forward investment in new plants will they avoid security of supply concerns and significant price increases. It is certainly no coincidence that this announcement comes on the same day that government confirms a £290 million investment into renewable technology projects, signalling its ongoing commitment to decarbonising the UK’s energy mix. This is a measure, however, that won’t go far enough on its own.”

Richard Benyon, former environment minister

“The commitment to phase-out coal is another clear indication that the new government understands its responsibility to act on climate change and the opportunities this brings.

“As we leave the EU it’s incumbent on the government to ensure Britain’s environmental protection is stronger than ever and our economy positioned to take full advantage of the monumental global shift towards low-carbon goods and services.

“It is disappointing to see the UK fall behind in the recent EY Renewable Energy Country Attractiveness Index, so we must have consistency, clarity and pace in action to reassure investors and get us back in that race. A commitment to phase out coal is a very clear signal.”

Michael Grubb, professor of international energy and climate change policy, University of Central London

“Outlining how and when coal plants will cease to operate will pave the way for new investment, including gas. Coal is already struggling economically and removing coal clarifies the market space for gas during the 2020s.

“Overall reinforcing the existing commitments and clarifying mid-term plans increases investor confidence, so certainty on coal-phase out will help to bring forward new and cleaner capacity.”

Hugh Montgomery, director for the Institute for Human Health and Performance, UCL

“The health costs of our reliance on coal are unjustifiable. Burning coal in the UK is linked to at least 1,600 premature deaths, 68,000 additional days of medication and over 360,000 working days lost. This adds up to £3.1 billion in avoidable costs each year on an already over-stretched health budget.

“For these reasons alone a coal phase-out is well overdue and would be welcomed from a medical perspective. We have many other far cleaner and equally affordable ways of generating energy, but only one chance to enjoy clean and healthy air.

“The co-benefits of tackling climate change and improving health outcomes are increasingly clear across a range of issues, none more so than when it comes to coal and air pollution. It’s therefore imperative that government take these factors into account when deciding how best to take the policy forward. These are impacts we have ignored for too long. For the health of the country, it’s clear that coal has to go.”