Encore for Old King Coal

The trilemma – the balance between affordability, security and sustainability- has been the closest that UK energy policy has had to a guiding principle over the past decade.

However, when push comes to shove, some elements of the trilemma are more equal than others, argues Malcolm Grimston, senior research fellow at University of London’s Imperial College.

“Security trumps all, with economics probably second and environment a long way behind,” he says, adding it is “absolutely clear” that “severe interruptions” to supply would be “politically disastrous” for whichever party is in government.

That has played out over the past year, with already spiralling gas prices compounded by the war in Ukraine, leading to questions over security of supply.

The clearest manifestation of this shift can be seen in the renewed enthusiasm for nuclear power and the extended encore coal is enjoying as a source of generation.

Until this year, it looked like the UK’s surviving coal plants would not even stay open until 2024 when the government has said they must be phased out.

This time last year, the UK government made getting rid of coal generation one of its key goals at the Glasgow COP26 climate change conference.

But this summer saw Drax, EDF and Uniper all sign contracts with the National Grid electricity system operator (ESO), which will keep three coal-fired plants open for back-up power during the winter.

Uniper has also put on hold plans to decommission one of the four 500 MW units at its Radcliff plant in Nottinghamshire at the end of this month.

Josh Buckland, a former special advisor for energy at No 10 Downing Street, says: “There’ll be a willingness to at least keep it (coal) as a back-up reserve and you’ll be looking at something similar for next winter.”

“The expectation this winter is that coal will only be used as a last resort,” says Dr David Joffe, head of carbon budgets at the Climate Change Committee.

Asgeir Heimisson, senior associate for GB Power at Aurora, expects the pattern of recent winters to continue with plants like Drax only being dispatched when the market gets “really tight”.

He says: “Exactly the same will happen. We only really rely on (the) Drax and West Burton (plants) for additional support at really tight moments when there could be uncertainties about gas supply.”

Curbing emissions is not the only aim of energy policy and it is vital to keep the lights on too, says Joffe: “The climate is obviously important but it’s the only thing involved in energy policy and it’s not like we’re building coal plants.

“It’s not going to affect emissions for many, many years to come, it’s just a one-off this winter. Where we’ve got the capacity, we’ll probably need to use them more than we expected for emergency situations.

The likelihood is that probably coal use will be “elevated” for one winter, he says: “That’s justified in circumstances that are extremely unusual. Clearly the most important thing from a political perspective is that the lights stay on. In particular, it is really important for climate policy in the UK that the lights do not go out as a result of climate policy. If we said that you can’t run the coal plants and then there wasn’t enough electricity, that would be bad for perception of climate policy.”

In for the long-haul?

Perhaps a more worrying question in terms of the climate agenda will be whether the coal renaissance proves to be fleeting or more enduring phenomenon.

“That’s where it becomes more difficult for them to continue,” says Buckland, who is now a director at public affairs company Flint Global.

Beyond curbing emissions, there are other sound reasons for eradicating coal from the UK system, argues Adam Bell, the former head of energy strategy at the Department for Business, Energy and Industrial Strategy (BEIS).

Pointing out that Russia supplies about one fifth of UK coal power imports, he says: “We import a surprising amount of coal from Russia. Obviously, that is ultimately unsustainable.”

Adding the expense of fuel on top and it is unlikely fuel’s stay of execution will be extended, says Bell: “It’s a crisis thing. By 2025, depending on world events we will back away from it.”

Heimisson expects that by 2024 Europe will have sorted out much of its gas supply concerns and the technical problems bedevilling the French nuclear fleet should have been fixed, meaning that the UK can rely on interconnectors for back-up power more than it has been able to this winter.

Meanwhile the continued flood of new wind and solar generation onto the system will mean progressively less need for fossil fuel power, says Joffe: “We have other forms of generation gradually coming onto the electricity system, which squeezes the room for fossil fuels in general. Therefore you can hold gas generation at its current level or bring it down even while also coming off coal because offshore wind in particular will be coming on to fill the gap.”

Getting new offshore wind farms planned and built within the next 18 months will be too big of a stretch but other forms of renewables can be deployed within this timescale, he says: “We can roll out onshore wind and solar in less than a year with a favourable planning treatment and a sense of urgency.

“So there’s still the possibility that we can we reduce the amount of fossil generation we need significantly as well as clearly things we can do to limit the demand. We can shrink the size of fossil generation we need significantly over the next 18 months.”

Strong backing for nuclear 

While coal may be enjoying an Indian summer, nuclear power too is back in vogue, at least in government circles, as a response to the current crisis.

Ex-prime minister Boris Johnson recently pointed out that the once controversial strike price of £92.50/MWh, which EDF secured for its Hinkley Point C plant in 2017, doesn’t look such a bad deal in the context of current wholesale prices.

“Most things stack up financially at the moment: it’s a question of how long you think the prices are going to last,” counters Doug Parr, chief scientist at Greenpeace UK.

Given that any new reactor commissioned today will only be operational in the first half of the 2030s nuclear isn’t the answer to the current crisis, says Grimston: “At last we are building nuclear stations, which we should have been doing decades ago but they’re not going to help us through the crises over the next five or ten years so it’s too little, too late, or certainly too late.”

Joffe agrees: “New nuclear can contribute to reducing gas consumption and to decarbonisation. The reality is also that it takes upwards of a decade to commission and build a new nuclear reactor.

“That doesn’t preclude nuclear being part of the solution to the next gas price if there is one, but it cannot be a short-term option. whereas onshore wind and solar can be deployed so much more quickly.

Short term though, the UK’s still operational nuclear power stations will play a valuable role in keeping the lights on this winter, says Heimisson: “We should be expecting nuclear to do as much as it can do for the next two winters.”

There is still just over 6GW on the system, including one of Sizewell B’s 600MW units that is due to shut for planned maintenance in February next year, he says: “It has to happen. No matter how tight the system is, it will be hard to justify keeping it online.”

He is confident that the system will be able to cope though, noting that the UK’s CCGT fleet has 30GW of capacity, which he can never recall generating simultaneously.

But longer term, the UK will have to face up to the closure of the vast majority of EDF’s aging nuclear fleet by the end of this decade, says: “I wouldn’t expect to see anything squeezed out of them beyond what they have said.”

While it may not be a short-term solution to this winter’s crisis, the “huge potential” future demand for electricity in a net zero energy system means all low carbon generation options must be on the table, says Joffe: “Whether it’s tidal or nuclear, you shouldn’t be ruling out any sources of zero carbon electricity because we might need them all.”

The potential trade-offs involved with ensuring security of energy supply will be discussed in full at Utility Week Forum. Find out more here.