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“Gas-fired power is now the electricity of choice”
The UK’s power generation mix witnessed a quiet revolution this summer.
Recent government data shows that Q2 2015 was the first time that renewable energy contributed a greater share to the mix than both coal and nuclear power. For those interested in the numbers: that’s 25.3 per cent for renewables; 20.5 per cent for coal; and 21.5 per cent for the UK’s nuclear fleet.
The government said the rise in renewables was due to higher wind speeds and increased capacity. And the renewables lobby said it was due to the “fundamental role” that renewables play in the UK’s security of supply.
But to me, this story says at least as much about collapsing commodity prices than anything else. With wholesale gas prices at historic lows, gas-fired power (at 30 per cent) has become the UK market’s electricity of choice when just a couple of years ago that title belonged to coal.
In mid-summer, with demand low and gas prices even lower, it is hardly surprising that coal-fired power should be pushed aside in favour of gas, and that renewables output would manage to contribute a greater slice of a smaller pie.
Yes, renewables have a part to play and deserve the government’s support. But if this summer says anything it’s that gas-fired power is crucial too, especially as uneconomic coal plants close at an increasing pace.
Failure to bring forward investment in new gas plant raises questions about the summers to come.
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