UK Energy Minister speech focuses on new gas, phasing out coal

By Erin Voegele | November 19, 2015

The U.K. government has announced plans to close all coal-fired stations by 2025. Although bioenergy was not specifically mentioned in the government’s announcement, Drax notes moving away from coal presents a significant opportunity for biomass.

On Nov. 18, the U.K. Department of Energy and Climate Change announced it intends to close its coal-fired power stations by 2025 and restrict their use by 2023. A consultation is expected to be opened early next year on the matter.

In a statement accompanying the announcement, Energy and Climate Change Secretary Amber Rudd stressed energy security comes first. “We are tackling a legacy of underinvestment and ageing power stations which we need to replace with alternatives that are reliable, good value for money, and help to reduce our emissions,” she said.

“It cannot be satisfactory for an advanced economy like the U.K. to be relying on polluting, carbon intensive 50-year-old coal-fired power stations,” Rudd continued. “Let me be clear: this is not the future. We need to build a new energy infrastructure, fit for the 21st century.”

In a speech highlighting the new policy, Rudd noted that even with significant growth in renewables, the U.K. has failed to reduce its dependence on coal. “Indeed a higher proportion of our electricity came from coal in 2014 than in 1999,” she said.

“We need a course correction using the tools we have already developed through Electricity Market Reform,” Rudd said. “We know competition works. It keeps costs low and can deliver a clean and reliable energy system. We want a consumer-led, competition focused energy system that has energy security at the heart of it and delivers for families and businesses. We want to see a competitive electricity market, with government out of the way as much as possible, by 2025.”

In addition to discussing the goal of less government support, Rudd specifically highlighted the role natural gas, nuclear, and offshore wind are expected to take under the U.K.’s new energy policies. She also indicated the need for U.K. achieve greater progress in developing low-carbon sources of thermal energy.

“Heat accounts for around 45 percent of our energy consumption and a third of all carbon emissions,” Rudd said. “Progress to date has been slower here than in other parts of our economy. There are technologies which have great potential, such as district heating, biogas, hydrogen and heat pumps. But it is not yet clear which will work at scale. So different approaches need to be tested. We need a long-term plan that will work and keeps down costs for consumers. We will set out our approach next year, as part of our strategy to meet our carbon budgets.”

Elaborating on the government’s goal to close the U.K.’s coal-fired power plants, Rudd said that “in an ideal world, the carbon price provided by the ETS would phase out coal for us using market signals. But it’s not there yet. So I want to take action now… But let me be clear, we’ll only proceed if we’re confident that the shift to new gas can be achieved within these timescales.”

According to statistics published by the DECC, coal’s share of U.K. electricity generation was 30 percent last year, down from 36 percent in 2013. Renewables accounted for approximately 19.1 percent of U.K. electricity production in 2014, up from 14.8 percent in 2013.

In a statement provided to Biomass Magazine, Dorothy Thompson, CEO of Drax Group, said, “We welcome this consultation and the greater clarity it provides on future policy.  We will be working closely with the government on their proposals.”

“Over the last decade we’ve developed the latest technology to transform our power station and more than half the electricity we generate now comes from sustainable biomass,” Thompson continued. “Coal and gas still produce the majority of our electricity and a truly diverse energy mix, including sustainable biomass, is the key to keeping the lights on in an affordable way. Getting coal off the system presents a huge opportunity for government to use existing power stations to generate affordable electricity using sustainable biomass.”

The U.K. Renewable Energy Association has also weighed in on Rudd’s announcement, noting her “speech will do nothing to reassure investors in the energy market and their confidence in the government and will do nothing to save industries such as solar, anaerobic digestion and biomass which have been left reeling over successive damaging policy interventions.”

“The UK has to attract new investment and the much needed new energy infrastructure to keep the lights on and we welcome the minister’s announcement that this will not happen without government intervention, but whilst the government is looking to subsidize new gas plant, it seems illogical that they are pulling support from renewables at the same time,” the REA said.

“We welcome the clarification on the future of coal, but that is mere tinkering around the edges of existing requirements,” said Nina Skorupska, chief executive of the REA. “What the minister has announced today will lock in more gas than we need at the expense of genuinely low carbon technologies.”

“In the lead up to the crucial climate talks in Paris which Amber Rudd has stated she wants the U.K. to be leaders, but the rest of the world will see a country prepared to subsidize gas whilst simultaneously removing support to renewables,” Skorupska continued.

James Court, heat of policy and external affairs at the REA, noted the impact of the policy change on renewables development. “Amber Rudd has yet again stated she wants to decarbonize in the most cost-effective way, but her actions through supporting higher cost technologies, such as nuclear, at the expense of more cost-effective renewables such as onshore wind, solar and biomass, means consumers will be paying more,” he said.

“We need government intervention to build any new energy infrastructure the U.K. needs, but the announcements today will mean subsidizing too much fossil fuel, for too long,” Court continued. “This speech gives no comfort to companies and investors wanting to bring down costs for renewable technologies, and leaves the whole renewable heat industry in limbo as they still wait to find out if RHI has a future.”

The Anaerobic Digestion and Bioresource Association responded to Rudd’s announcement by highlighting the role biogas can play in the U.K.’s energy future. “There’s often an assumption that the choice facing our country is one between supporting renewable electricity or non-renewable gas stations,” said Charlotte Morton, ADBA’s chief executive. “Baseload gas from anaerobic digestion (AD) is a cost-effective, green solution to the government’s energy security concerns that could match the capacity from coal-fired power—meeting either 30 percent of U.K. domestic gas or electricity demand. But much more than that—AD improves: farming resilience; food security; and employment and investment opportunities for rural economies.”