Government Regulation Closing All Coal-fired Plants by 2025
In January 2016, then-Secretary of State for Energy and Climate Change Amber Rudd announced that all UK coal-fired power plants would be closed by 2025, with their use restricted by 2023 at the latest. Rudd promised to prioritize energy security, competition within the energy market and a reduced financial burden on bill-payers, as well as ensuring that the replacement energy comes from sources that are affordable, clean and low-carbon. Rudd stated that “it cannot be satisfactory for…the UK to be relying on polluting, carbon intensive 50-year-old coal-fired power stations. We need to build a new energy infrastructure fit for the 21st century. Our determination to cut carbon emissions as cost effectively as possible is crystal clear and this step will make us one of the first developed countries to commit to taking coal off our system.”
The initial response to this proposal was positive. Nick Mabey, chief executive of think tank E3G, said that ’it is significant that the country that led the industrial revolution is the first major economy to set a date for the phase out of unabated coal’. A total removal of coal from the UK’s energy landscape would contribute greatly towards achieving both the UK’s commitments in the Paris Agreement, and the emission reduction targets obligated by the UK Climate Change Act 2008.
However, this positivity was mitigated by several factors. First, Rudd emphasized that gas would be prioritized as the replacement energy source: a move Friends of the Earth described as “like an alcoholic switching from two bottles of whiskey a day to two bottles of port”. Although gas is less emission-intensive compared to coal, it is still a finite, fossil fuel-based resource that releases a considerable amount of emissions—an amount that is incompatible with achieving the UK’s long-term emission reduction targets. Second, the speech—and existing government policy— does not contain support for renewables as a method of ‘filling the gap’ that removing coal will open up. Indeed, much governmental policy has worked against renewables: the feed-in tariff for small scale solar installations was cut by 87%, financial aid was removed for new onshore wind farms and energy efficiency projects, and the Green Investment Bank (that funds projects contributing to the decarbonization of the UK’s economy) is in the process of being sold off. Paul Ekins, Co-Director of the UK Energy Research Centre, questioned, “who will invest in the new gas-fired power stations the government wants to replace coal, after its U-turns on renewables have left so many investors who believed past government policy out of pocket?”
Though Rudd’s proposal was headline-grabbing, evidence suggests that it is not as revolutionary as it first appeared. Coal usage in the UK has been declining for decades—and rapidly so in the past 5 years. Usage dropped 41% in 3 years from 2013 to 2015, with a huge drop of 22% between 2014 and 2015—which was the largest-ever annual reduction in coal usage not including from the miner’s strikes. As a share of the UK’s energy landscape, coal decreased from 29.7% in 2014 to 22.6% in 2015—whilst gas and nuclear remained roughly the same, but renewables gained 6%: eating up most of the capacity coal had dealt with. The UK’s coal consumption is now at its lowest levels since the start of the industrial revolution, and this is due to several factors. The central of these is the recent pre-planned closures of coal power stations that have reached the end of their workable lifespan. In 2016 alone 8 gigawatts of coal capacity (half of the UK’s remaining capacity) was closed. Second, Drax, the UK’s largest coal plant, switched to burning wood pellets instead. Third, the profitability of coal plants has plummeted due to falling wholesale electricity prices, the rising UK carbon floor price, and the cheapening of renewable alternatives. Overall, this points to the conclusion that coal was—due to ageing infrastructure and market forces—already being phased out at a rapid rate without the need for Rudd’s statement of intent. And though such a statement is always welcome for environmentalists, the clauses that Rudd included in her proposal mitigate the potential benefits that the policy could have had, and will ensure that while emissions are greatly reduced in the short-term, the UK’s long-term emission reduction targets will be wholly missed.