UK could meet carbon budgets with coal-fired plants on system - CCC

15 July 2014 19:18 Source:ICIS

Keeping existing UK coal-fired power plants on line over the next few years would be compatible with meeting shorter-term carbon budgets, according to a report published on Tuesday by the Committee on Climate Change (CCC).

One third of the UK’s electricity must be produced by renewable energy sources by 2020 if the country is to meet overarching sector targets, with many coal plants forced to close by then or soon after, under environmental regulations.

The plants – around 18GW in total – face restrictions from 2016 and could be forced to close by the end of 2023 under the EU Industrial Emissions Directive (IED).

But the report’s findings indicate that a rapid closure of existing coal-fired capacity as was predicted by power system operator National Grid earlier this month ( see EDEM 10 July 2014 ), may not strictly be necessary to hit shorter-term emissions reduction targets.

Tuesday’s study, released by the government’s advisory body on reducing greenhouse gas emissions, analysed the country’s progress since 2009 in meeting carbon budgets.

In order for the UK to fulfil the EU-set target of renewable energy making up 15% of the country’s total final energy consumption, 30-35% of electricity will have to be produced by renewable power sources, said the report, although a specific target for power generation is not set at EU level.

Coal closure

“Provided that investment in low-carbon technologies proceeds, by the 2020s existing coal plant will either close or run at very low load factors to balance the system,” the report said.

“Keeping UK coal plants open in the near term would also be compatible with meeting carbon budgets,” according to the report, adding that it would not increase overall EU emissions under the current Emissions Trading Scheme (ETS) rules. B

ut by 2020s, the share of coal in the fuel generation mix is set to fall. “Provided that the UK continues to deploy low-carbon capacity at the rates set out in our indicators, it will still be able to meet longer-term targets, as long as coal eventually comes off the system,” the study said.

In order to enable renewable power generation to increase, the back-up capacity provided by fossil fuels will have to increase. “Both existing coal and existing/new gas plant could be candidates to provide this capacity,” the study said.

Some existing coal plants are set to close under the EU Low Combustion Plant Directive, but others may stay open. “Low carbon prices, driven by economic weakness within Europe, together with low coal prices and lower than expected costs for compliance with air-quality regulations, raise the possibility that old coal plants will continue running in the UK for some time,” it said.

It was originally expected that EU air quality directives would lead to European-wide closure of coal plants, but from 2012-13 the price of gas increased while coal decreased, which led to an increase in profit margins for coal-fired power plants, known as the clean dark spread, between January 2011 and January 2014.

But looking ahead past 2023, when most coal-fired capacity is expected to have closed: “The shift away from unabated coal is a very important part of reducing emissions.”

Renewables by 2030

To reach 2030 emissions targets, the CCC outlined a necessary capacity of around 25-40GW of offshore wind, up to 10GW of carbon capture and storage-equipped fossil-fuel fired plants, 13-25GW of onshore wind and 12-17GW of new nuclear plants must be in place by 2030.

But the report also highlighted that the amount of back-up generation needed could be reduced, both by reducing demand and managing variations in demand and supply more efficiently.

Increased interconnection between the UK and Europe is needed to help manage varying demand and supply, said the report.

New interconnectors totalling 3.4GW of capacity are under development, connecting the UK market to France, Belgium and Norway. But an additional 10GW of interconnector capacity is required by 2030, making the total 18GW, according to the CCC. Abigail Beall

By Abigail Beall