Business Gas and Electricity News

UK government announces plan to close coal plants

09 January 2018

Three plants shut in 2016, and most of the plants are likely to suspend operations by 2022. Because of new pollution standards, the last ones will be obliged to shut down by 2025. Experts affirmed that permitting coal operators to continue obtaining capacity market subsidies extended the sector lifetime in an unnecessary way.

Dr Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit, a UK-based thinktank, iterated: “While delivering on the top line of a 2025 closure, the government’s decision to allow coal plants to compete in the capacity market on equal footing until then looks like something of a missed opportunity.”

While no coal power stations shut down in 2017, the government’s official assessment accentuates that a carbon tax and relatively low gas prices have hurt the profitability of coal plants.

One major plant is expected to close this year, and 250 jobs will be lost, followed by a further shutdown next year. 

The government estimates coal’s capacity of 13.8GW last year will have diminished to 1.5GW by 2025 because of unfavourable economics. The phasing out of coal plant in seven years’ period will be executed via the use of a new emissions performance standard, which ministers will need to empower by law soon.

The standard establishes a limit on the amount of carbon the plants can release – 450g CO2 per kW hour. Officials think the cost of the coal phase-out policy would attain less than 1% of an average household energy bill.

Another expert shared his opinion on the topic. Sam Bright, energy lawyer at the campaigning law firm declared: “We are concerned that the door is left wide open for investments in new, long-term gas capacity, locking us into another generation of fossil fuel power.”

Originally published at energymarketprice.com