UK Coal Plants set to Clash with Government – FT

Most UK coal plants will not go quietly into retirement in 2025 as the government wants them to, according to a report in today’s Financial Times. Last autumn in the run-up to the COP21 talks in Paris, the UK Secretary of State for Energy and Climate Change, Amber Rudd, announced plans to consult with the industry this spring on her plan to close all such plants by 2025, making the UK the first country to have such a date for ending coal-fired generation. That was subject though to national security of supply being adequate.

European Union rules on lower power plant emissions came into force this week and seven plants elected to sign up to these tighter rules, rather than apply for an opt-out which would have led to their closure by 2023. Some plants are not planning to close, such as Drax, which is converting some of its plants to wood pellets; and two plants operated by French state-owned EDF, which are being refurbished to become more efficient. Closing them down will require ministerial intervention, the FT report says.

UK gas-fired power generation capacity has suffered from years of under-investment as the market signals have been too weak, although today’s lower gas prices make it more attractive. Rudd’s predecessor in the coalition government, Ed Davey, made much of the fact that gas would only become more expensive over time in order to justify further subsidies for wind and other renewable power, pushing up bills for consumers. But with oil prices so low and unlikely to recover to its 2014 level, that argument is no longer credible. 

The present winter sees the surplus generating capacity, compared with peak demand, at its lowest level yet. This has led to gas and power networks operator National Grid making payments to consumers to reduce their demand and to generators to increase their output at key times. Last year coal accounted for a quarter of the UK’s mix, down from 31% in 2014.

William Powell