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UK government sets date and terms for the end of coal

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The UK government has today set the date and terms for its phase out of unabated coal generation on the country’s electricity grid.

The plans have been in the works for more than two years after the government originally announced in November 2015 its intent to phase out unabated goal generation in Great Britain by 2025.

This was followed by a consultation launched a year later, which ran until February 2017.

Having assessed nearly 6,000 responses, this morning the Department for Business, Energy and Industrial Strategy established precisely how the phase out will occur and when it will be completed.

The government has decided against mandating for carbon capture and storage to be fitted on existing coal plants, ruling that to be too cost prohibitive without significant government support, and instead decided to set a new emissions intensity limit on generating units.

This has been set at 450gCO2/kWh, a figure BEIS said was broadly in line with emissions intensity of unabated gas plants. That limit will apply to units burning solid fossil fuels with a thermal capacity of more than 300MWth.

The government has also enforced that the emissions limit is applied instantaneously – i.e. not to be taken on annual average – meaning that unabated coal firing plants could not open for limited periods of time throughout the year and then switch off.

How that limit applies to co-firing plants is yet to be decided upon however, with BEIS insisting an additional response on this matter is to be published soon.

That figure will apply from 1 October 2025. It has been designed to coincide with the beginning of the 2025/26 Capacity Market period.

The consultation response confirms that the government did consider moving the date forward from 2025 but ultimately concluded that it was not warranted to do so.

The government’s next consideration was to ensure an “orderly transition” away from coal, a feat made all the easier considering that the rise of renewables has already edged a considerable amount of coal off the grid.

Having produced 22% of UK electricity in 2015, just 9% of power originated from unabated coal plants in 2016 and 2017 looks set to record further reductions still. The government today noted that in Q2 2017 just 2% of the UK’s power came from coal.

An accompanying impact assessment also reveals that the government expects just 1.5GW of unabated coal generating capacity to still be operational by 2025, with the remaining capacity switching off in the early 2020s as generation becomes more cost ineffective.

It is for this reason that the government has considered it unnecessary to set other constraints in the period leading up to 1 October 2025.

The government has, however included a provision to suspend or amend the measures in an “emergency situation” that might cause a shortfall in electricity generation. That measure cannot be invoked after 1 April 2025, but could allow the government to suspend the phase-out for a maximum period of 90 days at a time.

The government’s response does stress that it considers this “extremely unlikely” and would only be used as a last resort, ultimately pointing towards existing measures such as the Capacity Market to procure sufficient generating capacity to cater for the country’s demand.

It could however be a pointed measure in the event that more significant projects, particularly the under-construction Hinkley Point C nuclear reactor, suffer further delays. Hinkley is due to come on-stream in 2025 but has been beset by continuous delays.

Unabated coal plants will be blocked from entering the 2025/25 Capacity Market auctions but will be allowed to enter until then. More than 6GW of unabated coal received CM agreements for the 2020/21 winter period and more than 11GW of coal-firing facilities, the majority of which are owned by EDF, Drax and Uniper, have been pre-qualified for next month’s 2021/22 auction.

The government’s decision to continue to allow coal-firing plants to compete in the Capacity Market on an equal footing with other, cleaner generators has been criticised, with the Energy and Climate Intelligence Unit’s Jonathan Marshall arguing it to be a “missed opportunity”.

“In light of recent rhetoric, observers could have expected a stronger move from the government, that would utilise the market to remove coal generation as soon as possible rather than handing it another lifeline,” he said. 

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