BEIS finalises plans after coal phase-out consultation

The government confirmed its interntions to phase-out coal by 2025, although the Secretary of State will retain emergency powers to suspend the backstop. The government is planning for a 2021/2022 bill accompanied by a final impact assessment.

January 5, the Department for Business, Energy and Industrial Strategy (BEIS) released its responses to public comments on a coal power phase-out. Most responses to the consultation were supportive of regulating unabated coal power station closures, citing greater certainty in markets and the positive effects on support for alternative low-carbon power sources.

The majority of these responses favoured a unit-by-unit limit on carbon of 450g of CO₂ per kilowatt hour over carbon capture and storage incentives. The former is the less prescriptive of the two and not reliant on such immature technology. This measure will come into effect 1 October 2025.

Will Gardiner, CEO Drax Group, operator of the largest coal plant in the UK said that they appreciated the clarity: “As we’ve said before, coal doesn’t have a long term role to play in a low carbon future. We’ve already seen a dramatic fall in power generation from coal - an 84% reduction in the last five years, and a major shift towards lower carbon technologies. At Drax we’re exploring options for repowering our remaining coal units to use sustainable biomass and gas.”

The government also intends to limit coal plants’ ability to participate in the Capacity Market, an auction that aimed at maintaining energy security, by the 2025/26 delivery year. There are four-year and one-year-ahead auctions, the former being closed to coal in 2021/22, the other in 2024/25.

Despite many opinions that an emergency option to extend coal’s place in UK energy production would only create uncertainty, the government has opted to keep it as a measure of last resort.

Although some speculated that most unabated coal power stations may be decommissioned by 2023, the government expects that 1.5GW will remain by 2025, although they stated that coal’s decline globally is necessary to counter climate change.

Commenting on the BEIS response, Frank Gordon, Policy Manager at the Renewable Energy Association said: “We welcome the confirmation of this coal phase-out decision today and the further details regarding how this historic transition will be implemented.”

However, he qualified this statement by saying: “The constructive decision to phase-out coal is also somewhat undermined by recent proposals from the Department to restrict the development of new biomass plants in Government auctions, including a lack of funding for coal-to-biomass conversion. Converting retiring coal facilities to sustainable biomass is the most cost-efficient way to transition these existing assets to this new low-carbon future and to retain and grow jobs and investment.”

This article was written by Luke Acton, assistant editor of Bioenergy Insight.

Corrected 17/01/2018: The subheadding misstated that the government planned the coal phase out by 2050.