RWE decision signals death knell for UK’s coal-fired power
Last updated on 9 January 2014, 5:35 pm
High cost of retrofitting power plants means coal likely to fall away as UK attempts to comply with EU regulation
Most of the UK’s coal-fired power looks increasingly likely to come off the grid in less than a decade as Germany’s RWE today became the latest utility to shun costly retrofits to its old, carbon-intensive plants.
Coal-fired power is blamed by scientists as the single biggest contributor to climate change and currently accounts for 40% of Britain’s energy mix, but looks likely to fall into single digits within a decade as old units close.
RWE’s UK subsidiary npower said it had chosen to run down the operating hours for seven of its coal-fired power plants, meaning they are likely to close by 2023 to conform with the EU’s Industrial Emissions Directive.
“RWE has invested more than 5 billion pounds ($8 billion) into new power stations for Britain in the last 5 years. However, power stations across Europe are finding market conditions increasingly difficult,” said Kevin Nix, a managing director in a statement.
But generators won’t have to make a final decision until the end of 2015, which is after the next general election, when utilities are likely to have greater clarity on future energy policy.
Planned rises in Britain’s levy on carbon emissions and the possibility that coal becomes more expensive had already raised doubts over whether the UK’s coal-fired capacity would be profitable by the end of the decade.
Utilities have a third option to switch to biomass, a choice taken by Drax, western Europe’s largest coal-fired power station.
Last month UK utility SSE said it wouldn’t retrofit old coal-fired power plants either, meaning both plants are also likely to close ten years from now.
Around 15 gigawatts (GW) of the UK’s coal-fired capacity will have to decide how to comply with the EU directive, and can choose between converting to biomass, opt to close in 2023 or upgrade, according to Sandbag, which monitors European climate policy.
Last year, the UK’s energy regular Ofgem warned of potential blackouts because coal-fired power plants will close, while some MPs in the ruling Conservative Party have urged the government to flout EU laws and keep capacity open.
Last month Britain’s Energy Minister Michael Fallon told The Times newspaper that the government would not challenge the EU emissions directive and that coal-fired power would likely disappear from Britain by 2030.