UK’s coal plant closure plan could put power supply at risk

Source:Reuters Published: 2016-1-26 19:38:09

Coal plants provided more than a quarter of the UK's electricity in the first nine months of 2015, government data showed, and experts warn that new plants are not being built fast enough to compensate for the planned closures.

According to the report from the engineers institute, if the coal plant closures are combined with the shuttering of ageing nuclear plants, there could be a supply gap of 40 percent to 55 percent, based on current typical supply.

"If we get to 2023/2024 and the lights are flickering then of course you would expect the government to step in and say plants can stay open," said Peter Atherton, an energy industry analyst at investment bank Jefferies.

The report said the UK would need to build about 30 new gas plants in less than 10 years to plug the gap, and that looks unrealistic given current electricity prices, which are remarkably low.

Even before the government's announcement in November 2015, many older coal plants were expected to close by the middle of next decade.

However, the operators of seven plants capable of generating a combined 13 gigawatts have left the door open to keeping their generators running.

SSE, Drax, E.ON, EDF Energy, RWE and Engie all chose this month to put some of their coal plants into a government scheme, which means they could be modified in due course to meet emissions targets under the EU's Industrial Emissions Directive.

Plants that have not been earmarked for possible changes must be closed by 2023 at the latest.

"The decisions by the operators raise the possibility that some of these plants could still be running in 2023 and beyond in conflict with the government's plans," said Ali Lloyd, senior principal consultant at the consulting and engineering firm Poyry.

"The government will need some kind of legislation which effectively bans coal in order to make them close," said Lloyd, the  consultant.



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