Unabated Coal Plant Closure (Britain)

Consultation on the closure of unabated coal generation in Britain by 2025 was recently held. It has been known that unabated coal generation would cease, because this had already been announced. The UK Government has now published its implementation plan today – here. This sets out the plan to realise the ceasing of unabated coal generation in Britain by 2025 (as of now, there are no coal plants in Scotland). NB: energy policy is a reserved matter in Scotland and a non-devolved matter in Wales. Energy policy is a devolved matter in Northern Ireland.

A new emissions intensity limit will be applied to generating units, of 450g CO2 per kWh of electricity generated, from 1st October 2025. This limit is broadly the emissions intensity of an unabated gas generator and is in line with the existing Emissions Performance Standard that applies to new build fossil fuel plant. The limit will be applied on a unit-by- unit basis, as proposed in the consultation. Units could meet this standard by investing to abate CO2 emissions significantly.

Note: the 450gCO2/kWh emissions intensity limit will be an instantaneous limit. This contrasts with the existing Emissions Performance Standard, which sets an annual limit on CO2 emissions from fossil fuel generators, based on their capacity and an assumed 85% annual load factor. Applying the existing Emissions Performance Standard on an annual basis could allow unabated coal units to run at relatively low load-factors and this will not be permitted.

As proposed in the consultation, to ensure that the emissions intensity limit is applied only to generating units that use coal and that there are no unintended consequences for other forms of generation, the limit will be applied to units burning any solid fossil fuel (i.e. coal, lignite, etc.), irrespective of site boundaries, and with a thermal capacity of over 300MWth. Compliance with the emissions intensity limit will be on a net CO2 basis, in that emissions from other fuels co-fired with solid fossil fuel will be included in the calculations for emission intensity. The emissions intensity limit will not apply to units that convert fully to other fuels.

To avoid the use of unsustainable biomass in units that co-fire – for the purposes of compliance with the emissions intensity limit, the net CO2 emissions from coal units co-firing with biomass will be calculated as the sum of the emissions from the coal element of the fuel diet, plus net life-cycle CO2 emissions attributable to the biomass element of the diet. It is recognised that this will have the incidental effect of increasing the relative proportion of biomass that would need to be combusted with coal in order to remain under the emissions intensity limit. This does not preclude any other biomass sustainability requirements that might be introduced in the future.

The documents published today identify that Coal is the most carbon intensive fossil fuel and that the decline in coal generation over the last few years has led to a significant reduction in the carbon intensity of the power sector. The UK Government assessment, as set out in their updated Impact Assessment, is that the closure of unabated coal plant will yield guaranteed reductions of 15MtCO2. In addition to this, reductions of harmful air pollution such as Sulphur Dioxide (SO2), Nitrogen Oxides (NOx) and particulate matter (PM) will be guaranteed. This will contribute to the improvements in air quality that are being actively pursued at national level (in response to court action also) to reduce impacts on human health and the environment.

In 2017, the UK Government published an air quality plan to reduce roadside concentrations of Nitrogen Dioxide and in 2018, the UK Government will publish a Clean Air Strategy outlining its plans to reduce emissions of air pollutants from a wide range of sources. This will be a further Blog post.

Note: the UK Prime Minister will give a speech on the topic of the Environment next week. Depending on its content, this may be a further Blog post.

The documents published that the UK government is considering the appropriate legislative vehicle for introducing the emissions intensity limit from 1 October 2025 and other measures required to implement it. As the introduction of the emissions intensity limit will prevent unabated coal units entering into the Capacity Market auctions held in late 2021/early 2022 for the 2025/26 delivery year, and subsequent auctions for delivery years beyond that, the documents state the required legislation can be expected before these 2021/22 auctions. A final Impact Assessment will be published at that time. A further Blog post may be made at that time, or this post updated. Post updates do not forward to inboxes, so please make a note to return to check this Blog post.

Energy Bill 2013-2014 Energy Performance Standard (EPS)

I posted earlier on the House of Lords (HL) amendment to give the Secretary of State the power to apply the EPS to any fossil fuel power station continuing to operate (by upgrading to the European Industrial Emissions Directive – IED).

The HL amendment was defeated yesterday in the House of Commons – my updated post is here.

The EPS will limit the amount of annual CO2 emissions to be allowed from new fossil fuel generating stations, and those extending their life through substantive investment (Energy Bill 2012).

The HL exemption (from the EPS until end 2027) proposed for new fossil fuel plant equipping themselves with Carbon Capture and Storage (CCS), itself subject to environmental permitting, is agreed.

My updated post on CCS is here.

Update (11th December 19.00) – the EPS matter returned to the House of Lords and is now accepted (no further amendment). The next step is Royal Assent.

The position is – the EPS will limit the amount of annual CO2 emissions to be allowed from new fossil fuel generating stations, and those extending their life through substantive investment. Exemption (from the EPS until end 2027) will exist for new fossil fuel plant equipping themselves with Carbon Capture and Storage (CCS), itself subject to environmental permitting.

Energy Bill 2012-13 Emissions Performance Standard (UK) (HL amendment)

UPDATE: House of Lords amendment (older coal fired stations) is defeated (4th December vote of the House of Commons).

An Emissions Performance Standard (EPS) is proposed to limit the amount of CO2 emitted by new fossil fuel power stations – this is a statutory limit set by the Energy Bill 2012 on the amount of annual CO2 emissions to be allowed from new fossil fuel generating stations. The limit is set at 450g/kWh until 2045. This document is an update on the technical details of the EPS.

The EPS does not apply to existing plant, which must in any event fit pollution clean-up equipment to meet tighter limits from January 2016. Under the European Industrial Emissions Directive (IED), plants that do not fit clean-up equipment will from January 2016 be subject to a 17,500 hour limit on their operation, after which they must close, or, from mid-2020 be limited to just 1,500 hours of operation a year.

The House of Lords had voted 4th November to give the Secretary of State the power to apply the emissions performance standard—EPS—to any existing fossil fuel power station upgrading to conform to the IED. The Energy Bill returned to the House of Commons, where MPs voted 318 to 236 (4th December) to overturn the amendment. The Government did not consider it necessary to grant itself this power.

Per the 4th December debate – “Let us be clear about what the amendment would do and what it would mean for coal plant. Coal plants operating in 2013 effectively have three choices. The first is to leave the plant as it is, without investment, in which case it would close some time before 2023, depending on how quickly it used the permitted hours of operation to which the Minister referred. The second is to upgrade in order to conform to the industrial emissions directive, as has been done at least once, at Ratcliffe-on-Soar, and as others are considering doing. The third is to upgrade more significantly to extend the lifetime and meet the IED stipulations.

The coal-fired power stations in the first category would be unaffected by the amendment. If they burned through their allowances quickly, operating at 55% load factor, they would still run until 2020, and because of the likely profitability of the capacity market being introduced, I suspect that many would choose to run at slightly lower load levels until 2023. The Government’s emissions performance standards, already in the Bill, will apply to the third category of plant—those that extend their lives through investment. The amendment would impact on the second group and take effect, effectively, from 2023.

The EPS limits on carbon emissions are expressed as the amount of CO2 per kWh, but they limit the amount produced not per hour but per year. A typical power station, therefore, would be limited to a 40% to 45% load factor without lowering its emissions rate. That means running at a low load factor, to manage peaks in demand or in winter, or becoming serious about CCS. Neither choice is the end of coal generation in the UK.

From the Minister’s remarks, it seems that the Government are not persuaded by the amendment for several reasons.”