Today’s Independent front page reports that the UK is set to miss its carbon targets because of coal-fired power stations staying open longer than expected.
The story is based on Imperial College research commissioned by WWF. The research concludes that coal-fired power stations could stay open into the 2030s, much later than the government expects.
Running coal into the 2030s would make carbon budgets hard to meet because coal is one of the dirtiest ways to generate electricity, with carbon emissions roughly double a gas-fired power station.
How many coal-fired power stations does the UK have now?
There are nine coal-fired power stations in Great Britain with a total capacity of 19 gigawatts. In 2013, these plants generated 131 terawatt hours of electricity, 36 per cent of the UK total. Coal’s share of electricity generation fell below 30 per cent in the first half of 2014.
There is also a 0.5 gigawatt coal plant in Northern Ireland. This operates in a separate electricity market with the rest of Ireland.
When will the UK’s coal plants close?
There has long been an assumption that most, if not all coal plants would close by 2023, because of EU air pollution rules under the Industrial Emissions Directive (IED). Back in July, campaign group Sandbag said this assumption might be wrong, because compliance with the IED has become cheaper than expected.
But the government continues to assume all coal plants will have closed by around 2027. The latest projections published in recent weeks by the Department of Energy and Climate Change (DECC) show coal-fired electricity being replaced by gas by the late 2020s.
Source: DECC emissions projections
Like Sandbag, the Imperial College research questions this DECC projection. Imperial carried out modelling of the UK power sector to try to work out how much coal will operate in future. Its model takes into account changing fuel prices, carbon prices and the cost of complying with the IED.
In contrast to DECC’s assumption that all coal will close, Imperial found some plants operating beyond 2030 under all of its model scenarios.
For instance even when Imperial assumed a very high carbon price, which should make high-emissions coal plants expensive to run, it found 5 gigawatts of coal capacity remained in 2030. Depending on the assumptions made, its modelling found between 2 and 12 gigawatts of coal capacity remaining in 2030 compared to 19 gigawatts today.
The different lines on the chart below reflect the range of Imperial’s assumptions about the carbon price (CPS), the costs of IED compliance and other factors. The grey line going down to zero reflects DECC’s assumption that all coal plants will close by 2030.
Source: Could retaining old coal lead to a policy own goal?
Predicting the future of energy is extremely difficult. Imperial was unable to model some aspects of the electricity market and says its results may represent a “worst case” outlook in terms of UK coal plants continuing to run. But it says its model captures a range of plausible futures.
One uncertainty not explored by Imperial is a change in IED rules that is due to be discussed by technical experts at a meeting in January. The rules on coal-plant emissions of sulphur dioxide might be significantly tightened. This would make it harder, though still not impossible, for coal plants to continue running after 2023.
Another uncertainty is the government’s planned capacity market, designed to ensure there is always enough electricity-generating capacity to keep the lights on. Some coal-fired power stations are planning to bid for capacity market support, a move that could make it easier for them to stay open for longer.
The Imperial report says all of these uncertainties could be removed for energy investors if the government signalled its intention to discourage or ban coal-fired power stations through an increasing carbon price, increased support for renewable alternatives and a limit of the carbon emissions of existing coal fired power stations after 2023.
Is the government going to phase out coal?
The Independent and several other reports say the government has already pledged to phase out coal plants by the late 2020s. This is not true: the government has no specific policy to phase out coal.
Instead, DECC assumes a portfolio of policies including the IED will push coal plants out of business. It has previously called this expectation a “phase-out”. The next government could go further towards bringing in a real phase out, by following the Imperial recommendations.
The Liberal Democrats say they will include a ban on unabated coal from 2025 in their 2015 election manifesto, for instance. The Labour manifesto will include a slightly different pledge that could amount to the same thing – a 2030 target to decarbonise electricity generation.
Will the UK miss its carbon targets?
The government’s Committee on Climate Change (CCC) has recommended that power sector carbon emissions in 2030 should be cut to 50 grammes per kilowatt hour if we are to decarbonise the economy in the most cost-effective way.
This power sector target is unlikely to be met if any coal-fired plant remains open in 2030, as the Imperial research suggests it might. The Independent says missing the power sector target would mean the UK was set to miss its economy-wide carbon targets.
Former CCC chair Lord Adair Turner says running unabated coal into the 2030s could “blow a hole” in plans to create a low-carbon UK.
The UK could choose to keep running unabated coal if it reduced emissions in other parts of the economy more quickly to compensate. Unfortunately the UK is also off track in other parts of the economy. So running coal into the 2030s would make the UK’s carbon targets tough to meet.