On Friday 5 January the Department of Business, Energy and Industrial Strategy (BEIS) outlined its implementation plan for phasing out coal power generation in the UK. From 1 October 2025 new emissions limits will apply to coal-powered generators which will force them to reduce their coal emissions or face being closed down.
The government’s response to consultation Implementing the end of unabated coal by 2025 focuses not only on the need to provide certainty for investors enabling them to invest in lower-carbon alternatives, but also clean growth and the ability to guarantee “further reductions in emissions of carbon dioxide as well as harmful air pollution such as Sulphur Dioxide, Nitrogen Oxides and particulate matter.”
The new emissions intensity limit will be set at 450g CO2 per kWh of electricity generated which is in line with the existing Emissions Performance Standard and is broadly similar to the emissions intensity of an unabated gas generator. The emissions intensity limit will apply to units burning any solid fossil fuel which have a thermal capacity of over 300MWth, with the exception of units that convert fully to other fuels. The government considers the new emission intensity limit will provide coal generators with more flexibility in relation to investment options to reduce emissions compared to mandating carbon capture and storage technology. However, many commentators have already pointed out that it is difficult to see how coal generators will be capable of meeting the new limits without retro-fitting carbon capture technology to existing plants.
The transition away from unabated coal, the most carbon-intensive of fossil fuels, has been on the government’s agenda for some time and has gained significant attention in recent years as a result of heightened interest in air quality following particularly ClientEarth’s successful challenges against the government’s Air Quality Plan as well as the UK’s ratification of the Paris Agreement in November 2017.
The new emissions intensity limit will apply on and from 1 October 2025 to align with the 2025/26 Capacity Market delivery year meaning that unabated coal units will be ruled out of the four and one year ahead Capacity Market auctions for 2025/26 delivery and thereafter.
BEIS expects that as a result of (i) the new emissions intensity limit; (ii) the requirements of the Industrial Emissions Directive; (iii) the effect of carbon pricing; and (iv) the relatively poor economics for coal generation, the majority of all remaining coal power stations in the UK will close in the early 2020s with an estimated 1.5GW of unabated coal capacity likely to remain until 2025.