NewEnergyNews: TODAY’S STUDY: From Coal To New Energy Without A NatGas Bridge


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    Monday, December 03, 2018

    TODAY’S STUDY: From Coal To New Energy Without A NatGas Bridge

    Coal To Clean; How the UK phased out coal without a dash for gas

    May 2018 (World Wildlife Fund and Sandbag)

    Key Findings

    ➤ The UK is on track to phase-out coal by 2025 and keep the lights on without building any new large gas plants

    • One large gas plant (Carrington) went into operation in 2016, the first since 2012. Under current policy, it is likely to be the last large gas plant built in the UK.1

    • By the end of 2016, there were seven coal plants left to replace, with a combined capacity of 14GW.

    • Contracts to replace five of these have already been signed - half with interconnectors, battery and Demand Side Response (DSR) - the other half with fossil generation, mostly small peaking gas generators. This capacity comes online from 2018 to 2021.

    • Our analysis shows the remaining two coal plants - just 2.8GW of capacity - are likely to be replaced in a similar manner, without the need for any new large gas plants.

    ➤ Renewables will completely replace coal generation

    • By 2025 electricity output from renewable sources will exceed the highest level of coal electricity generated in any year this century (which was 142 TWh in 2006).

    • 95% of the required renewables growth to replace coal is already contracted or under construction, the Government has promised additional funding for the remainder. Offshore wind will provide most of the growth from 2017 to 2025.

    ➤ The switch to a grid dominated by renewables means new capacity is only required to run infrequently - unsuitable for large gas plants

    • Meeting capacity requirements with large gas plants would be unnecessarily costly for UK consumers and would lock the UK into higher gas use and carbon emissions.

    • Already, the remaining coal plants do not operate very often (load factor averaged 19% in 2017).

    • Our analysis shows the replacements for coal will need to operate even less (just 3% load factor in 2025 on conservative assumptions). As coal closes, the existing gas fleet will supplant some of coal’s generation, and renewables will reduce the load further.

    ➤ Gas use in the electricity system has already peaked - but its rate of decline is less certain

    • In 2017, gas use was already 24% below the peak set back in 2008. In the majority of plausible scenarios, gas use will be lower or significantly lower in 2025 than it was in 2017.

    • The UK Government is relying on growing electricity imports to help decarbonise the electricity system: interconnectors are forecast to supply 22% of electricity by 2025. If this doesn’t happen, existing gas would generate more, and carbon emissions would be ~ 70MT higher than BEIS’s current projections by the end of 2025. Under such a scenario the UK would struggle to meet its legally binding carbon budgets.

    • Even if electricity imports are lower than expected or demand is higher, the UK is still unlikely to need new large gas plants - small distributed technology will fill the gap more cheaply. This report shows that faster renewables growth and improved energy efficiency mitigates these policy risks.

    Key recommendations

    The UK has so far successfully navigated the phase-out of coal, avoiding a gas bridge. However, meeting our carbon budgets in the next decade is not yet certain. Our recommendations for the Government are:

    1. Unleash the potential of solar and onshore wind now.

    a. Currently the lion’s share of the UK’s renewables growth to 2025 will come from offshore wind. A fast and cost-effective way to keep reducing gas emissions throughout the early 2020’s is a subsidy-free CFD auction for onshore wind and solar. Both technologies have short construction lead times and significant existing planning consent. Onshore wind is demonstrably cheaper than UK electricity wholesale prices, and with the UK’s first subsidy-free PV farm already commissioned, solar should be competitive too.

    2. Do not bring forward policy measures to support new build large gas.

    a. The lights will stay on after coal has been phased out - without new build large gas. On March 20th, Claire Perry MP announced a review of the Capacity Market - this review should not promote new build large gas.

    3. Prevent excess emissions from small peaking gas.

    a. Policy is needed to address the emissions from small peaking gas as poor market design may be artificially inflating running hours. The 450gCO2/kWh instantaneous limit proposed in the coal phase-out legislation should be extended to all new build generation with a thermal capacity of over 1MW. This will ensure small peaking gas is only used when absolutely necessary to support the grid.

    4. Increase innovation funding for long term electricity storage technologies.

    a. Longer-term electricity storage will be required to fill in for seasonal and multi-day lulls in renewables output if we are to phase-out gas from our electricity mix in the long term. While we welcome recent Government funding commitments in energy storage, we recommend the Government sets up an innovation fund to tackle long-term electricity storage specifically.

    5. Mitigate the risk of a slower fall in gas use and begin planning now for a gas phase-out.

    a. Policy is needed immediately to mitigate the risk of a slower decline in gas use caused by: increasing demand; delayed or cancelled new-build nuclear projects; or a reduced volume of electricity imports. Longer term, the government should look at the role of seasonal energy storage and carbon capture and storage technology in reducing gas emissions to zero.


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