In a “dramatic role reversal”, gas plants generated nearly twice as much power as coal plants in the first three months of 2016, according to energy specialist EnAppSys.
Gas plants provided 35.4 per cent (29.68TWh) of the UK’s electricity needs in the first quarter of the year, while coal plants supplied 16.2 per cent (13.56TWh).
EnAppSys said this was a “dramatic role reversal” since the first quarter of 2015, when gas plants made up 24.6 per cent (19.65TWh) of the energy mix and coal plants 35.9 per cent (28.7TWh). The energy specialist said the decline in coal generation was due to the carbon price support, the falling gas price and the push towards decarbonisation.
In her ‘energy reset’ speech in November, energy secretary Amber Rudd pledged to phase out all unabated coal generation from 2025.
This year, following the announcement, two coal-fired plants – Longannet and Ferrybridge – have already closed down, with a third – Eggborough – exiting the main energy market.
EnAppSys director Paul Verill said: “With this message as a backdrop and with coal stations in the UK paying much higher carbon costs than stations on the continent, many coal stations have taken the decision to close earlier than anticipated.”
The report said the awarding of black start contracts by National Grid to Fiddler’s Ferry and Drax should help to reduce the risk of supply shortages in the coming winter. SSE decided not to press ahead with plans to close Fiddler’s Ferry this spring after it secured the contract.
The decline in coal is leading to greater reliance on intermittent renewable generation, according to Verill, increasing the role of ancillary services and storage. “At times this has seen National Grid pay millions of pound on tight days to ensure that there is sufficient short term margin within the system.”
“One of the biggest issues facing the market into 2016/17 is the cost incurred to maintain margin until the capacity mechanism comes into full force in Oct 2018, and how National Grid and the government achieve this without distortion to market operation that can risk jeopardising investment in new build,” he added.
Last month, the Department of Energy and Climate Change announced an overhaul of the capacity market, closing the Contingency Balancing Reserve early and bringing forward to first delivery year for the capacity market to 2018.
Renewables generated 22.4 per cent (18.78TWh) of Britain’s power in the first three months of this year, the report said, compared to 21.3 per cent (17.05TWh) in the first quarter of 2015. Nuclear plants accounted for 19 per cent (15.98TWh) of generation down from 21.2 per cent (16.9TWh).