Coal power plants to close by 2025 as Government chases clean energy security

Gas and nuclear to be mainstays of future power mix says Energy Secretary Amber Rudd; but she announces three new offshore wind auctions though industry has to cut costs.

Jackie Whitelaw
19 November 2015

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Government’s ambition to close all coal powered energy plants by 2025 and focus the UK’s power supply around new nuclear and gas has been greeted positively by many in the industry.

Energy Secretary Amber Rudd announced on Wednesday that energy security was to be at the heart of a new direction for the UK’s energy policy. And ahead of the climate talks in Paris next month she said that a determination to cut carbon emissions “as cost effectively as possible” was at the heart of the decision to run down coal plants from 2023 with full closure two years later.

Rudd also announced plans for three new offshore wind auctions in 2016.

"New nuclear and gas will be central to our energy secure future and we are encouraging investment in our shale gas exploration so we can add new sources of home-grown supply to our real diversity of imports”  - Amber Rudd

“One of the greatest and most cost-effective contributions we can make to emission reductions in electricity is by replacing coal fired power stations with gas,” Rudd said.

“If we take this step, we will be one of the first developed countries to deliver on a commitment to take coal off the system.”

Rudd stressed the importance of nuclear and gas – including shale gas - power to the future energy mix.

“New nuclear and gas will be central to our energy secure future and we are encouraging investment in our shale gas exploration so we can add new sources of home-grown supply to our real diversity of imports,” she said. She announced that she was launching a consultation on a strategy to maximise the economic recovery of the North Sea along with the push to increase offshore wind power.

“We are world leaders in offshore wind and globally we can make a lasting technological contribution,” she said.  But support for further development would be “strictly conditional on the delivery of the cost reductions we have seen already accelerating.

“If that happens we could support up to 10GW of additional offshore wind in the 2020s.”

Claire Jakobsson, head of energy and environment Policy at EEF welcomed Government’s focus on security of supply and carbon reduction.

“Today’s speech marked a turning point for the UK’s energy strategy. At long last we are seeing a government addressing security of supply concern in line with decarbonisation goals,” she said.

“The Government has placed a clear marker in the sand with its announcement to end unabated coal by 2025 and given investors a clear signal to move forward with plans for new gas. Our dwindling capacity margin demonstrates the need to urgently bring forward investment in new gas plants and all eyes will be on this year’s capacity auction to see if it delivers.”

But she urged swift progress.

“While today’s announcements are reassuring for British industry, they must now be met with action. The consultations next spring may give greater clarity on much of the detail of delivery, but we must move forward quickly. We cannot afford more decades of delay impacting security of supply, risking international competitiveness and, ultimately, costing the consumer.”

Jakobsson’s call to action was echoed by GMB national secretary for energy Ben Strutton.  But he urged Government not to give up on clean coal.

"GMB welcome Amber Rudd's statement that energy security is the top priority in terms of UK energy policy,” he said.
 “But these welcome words need to be followed by action. 
 

“There were five days in the last 30 days when wind was supplying 10% or less than the installed wind capacity to the grid. On 4th November National Grid had to invoke special measures to keep the lights on.

“The Government has placed a clear marker in the sand with its announcement to end unabated coal by 2025 and given investors a clear signal to move forward with plans for new gas. Our dwindling capacity margin demonstrates the need to urgently bring forward investment in new gas plants and all eyes will be on this year’s capacity auction to see if it delivers” - EEF

“There can be eight to ten days per month when there is not a lot of output from the 10.2 W of installed wind capacity. There has to be back up reliable and clean power supplies available to cope with this. The only show in town now is gas and nuclear but Government needs to maintain investment in developing clean coal technology.

“7.4GW of capacity is likely to come off at nine stations by 2016. Only one station is likely to be built in the coming year – the Carrington, 900MW gas-fired station - that can provide solid, reliable power. The other major new build station – Trafford with around 2GW – has stated there are major financing issues.

“The question has to be asked whether a private monopoly like National Grid should be the body to deliver energy security.

“We have to get away from the bonkers position where National Grid use consumer’s money to pay firms to stop work in order to avoid winter blackouts. 
 

“Government needs to get on with finalising deals to get investment for nuclear power stations and gas-fired stations to supply reliable power. The investment will only happen when the framework is right which it is not now".
 

RenewableUK’s deputy chief executive Maf Smith was happy Government had set out a direction but wanted a rethink on onshore wind development which has been halted outside of Scotland. “Industry has been looking for clear signals from Government on energy policy to enable the long-term investment in the clean energy infrastructure this country desperately needs,” he said.

“It’s vital that we have a broad energy mix, and that means ensuring we utilise all our renewable energy resources. Wind power provided almost 10% of the UK’s electricity last year, and that is set to double by 2020. We’re a windy country and we shouldn’t turn our back on this great resource.

“Rudd’s speech provides clarity on where the Government stands on the future of offshore wind, which will give developers the confidence to invest in the British economy. Industry has already shown it can rise to the challenge of reducing costs and offshore wind companies are confident they will be cost competitive with new gas and new nuclear by 2025.

“Onshore wind has already achieved the kind of cost reductions needed to be competitive and is now one of the cheapest sources of home-grown power in the UK. If we want to cut emissions and keep bills low, Government needs to show that it won’t stand in the way of subsidy free forms of power, like onshore wind, being able to access our energy market and compete head-to-head with options like nuclear and gas.”