Leapfrogging over the gas bridge: how the UK can exit coal and gas

While Germany debates how it should wean itself off of coal, several other European nations have already made the decision to transition in that direction. L. Michael Buchsbaum takes a look at a new report by the World Wildlife Fund and Sandbag, which lays out a path for the UK to exit both coal and gas.

Cranes at the Battersea Power Station in London

The UK’s coal use has dropped to historic lows – with gas to follow (Photo by Gaetan Lee, edited, CC BY 2.0)


Though Angela Merkel receives accolades for her role in the Energiewende, it’s actually another female leader, the UK’s Teresa May, who is presiding over the UK’s clean energy transformation (albeit one she didn’t enact and may actually slow down). But there can be no doubt about the swift and stunning decarbonization of the UK’s energy sphere.

Since 2012, coal usage in the UK has fallen off the proverbial cliff: declining from 40% of generation to just 7% last year, and knocking 12 plants totaling 15GW off-line in the process. A further 8GW of gas and oil capacity along with another 1.5GW of first-generation nuclear plant power have also shuttered during this period.

How did this transformation occur without massive blackouts? While there was certainly some overcapacity in the marketplace, renewables have blossomed from 11% of the electricity supply to over 28% today. Led by offshore wind, costs are rapidly closing in on the wholesale price of electricity, thanks to policies including Feed In Tariffs (FITs), the Renewables Obligation (RO), Investment Contracts and Contracts for Difference (CFDs) and the UK’s additional carbon taxes. Falling demand, increased electricity imports from other nations and several gas plants that came on-line since 2000 have also filled coal’s void.

But Westminster seems hesitant about whether to add more renewables or simply swap natural gas for coal. “The UK government is leading the way and has set an international precedent by sending coal to the dustbin of history,” said Gareth Redmond King, WWF Head of Climate and Energy. “However, it is essential the Government does not substitute one dirty power source for another.”

Once touted by both liberals and environmentalists as a bridge fuel to renewables, natural gas has retained widespread conservative backing. But despite the UK’s massive fossil fuel holdings, the underlying energy marketplace is being propelled by a rapidly evolving renewables sector that could, if unleashed, entirely leapfrog over this bridge.

Recently the World Wildlife Fund and the London-based think tank Sandbag published a report illuminating a pathway for May’s Government to follow, laying out a detailed argument for why the UK can both “phase out coal by 2025 and keep the lights on without building any new large gas plants.” The Coal to Clean study’s technological premise is that given the switch to a grid dominated by renewables, new gas capacity will only be required to run infrequently to smooth out renewable’s inherent intermittency.

Being relegated to mainly playing the role of peaker plant, or anything short of baseload, has proven unsuitable and uneconomic for many large gas plants (several examples of which can be found, mostly sitting on hot-idle, in Germany). According to the report, new gas plants may become obsolete before they are built due to the UK’s existing capacity, as well as its many interconnects to the European continent, which shouldn’t be affected by the Brexit.

Additionally, as coal is pushed out, the report demonstrates that 95% of the required renewables scheduled to replace it are already contracted or under construction. The government has also allocated a £557m pot of funding for more renewables subsidies between now and 2025 while conservatively expecting annual renewables output, led by offshore wind, to grow by 48TWh by then.

Though many conservatives continue to push for new gas-fired plants, and 10 large facilities with a capacity of 12GW have applied for 15-year contracts (with an additional five with a capacity of 10GW waiting in the wings), “not a single one has bid successfully for a capacity contract.”

Why not? Because since 2012, the underlying market has significantly changed. Back then, any renewable project required large subsidies to get off the ground. Now, no new fossil project can be built without significant capacity market subsidies, as onshore and offshore wind prices creep within spitting distance of wholesale prices.

Indeed, the report suggests that gas may have already hit its peak. Though as late as 2008 it accounted for 45% of UK electricity generation, that figure has fallen sharply since. The Government’s own Clean Growth Strategy calls for a reduction to just 15% by 2032. Some projections show it falling to even half of that as renewables and imported energy from the continent progressively squeeze it out further, relegating it to just a balancing and back-up role. This is not to say gas will disappear. But “Coal to Clean” hammers home the message that the UK’s renewable resources alone are enough to fill in the gap left behind by coal.

Another factor in the energy mix is the role of nuclear power, which is expected to further decline between now and 2025 as several existing reactors reach the end of their planned lifetimes in the early 2020s.

Beyond unleashing the full potential of all renewables, the report suggests an increase in innovation funding for long-term electricity storage technologies will ensure that gas stays in the ground. Storage, increasingly combined with hydrogen, is beginning to take off globally. As it becomes easier to deploy, storage will be better positioned than gas and imports to balance renewable fluctuations.

The report also suggests developing policies addressing emissions from small peaking plants, further ensuring they only come on-line to support the grid when absolutely necessary. It also calls for a gas phase-out similar to the coal exit. “Policy is needed immediately to mitigate the risk of a slower decline in gas use caused by: increasing demand; delayed or cancelled new-build nuclear projects; or a reduced volume of electricity imports.”

“We need to continue to look forward, doubling down on investment in renewables and targeting our efforts on long-term energy storage. We should focus next on removing gas from the energy mix altogether,” said the WWF-UK’s Redmond-King.

by

L. Michael Buchsbaum

L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende.

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