UK: Gas instead of coal - and uranium instead of renewables

23.11.2015
Energy Minister Amber Rudd is backing gas and nuclear energy (Photo: www.amberrudd.co.uk)
Energy Minister Amber Rudd is backing gas and nuclear energy (Photo: www.amberrudd.co.uk)

The British government is always good for a surprise when it comes to energy policy. Following the decisions to give the nuclear industry exorbitant subsidies for building new reactors in the country as well as to drastically reduce funding for photovoltaics, Secretary of State for Energy and Climate Change Amber Rudd is now turning her attention towards coal-fired power plants. In a highly-anticipated speech on the realignment of British energy policy, she announced that all coal-fired power plants still in operation will reduce their power output by 2023 and will be shut down permanently by 2025.

At present, a quarter of the UK's electricity is generated by coal-fired power plants. They are to be replaced by gas power plants because, in her view, it is absurd that the country still relies heavily on coal, "the dirtiest fossil fuel". "We need to get the right signals in the electricity market" that coal will no longer stand in the way of new gas-fired plants, according to the secretary. She is also looking to address the legacy of lacking investments and outdated power plants. These older plants need to be replaced with alternatives that are reliable, inexpensive and help to reduce emissions.

Up to this point, one might interpret the speech as good news for the future of renewables in the UK. But the realignment has a catch: Instead of driving the development of wind and solar energy forward, the secretary is mainly backing nuclear power. A minimum of three new nuclear power plants are to be built (Wylfa in Wales, Moorside in Cumbria and Hinkley Point in Somerset), which will cover approximately one third of the country's electricity demand.

The only renewable technology that Rudd spoke of expanding is offshore wind energy. The secretary is planning three auction rounds for projects that will be built in the 2020s. The first of these auctions is planned for 2016 and is conditional upon the government's guidelines regarding cost reduction being fulfilled. Commentators see this as evidence that funding for other regenerative technologies via the contracts for difference model (CFD) is to be completely abolished.

The first strong reactions from industry associations and companies came immediately after the speech. "The government’s policies mean that our energy policy is now in the extraordinary position that, apart from coal, pretty much the only new electricity generation not to receive subsidies will be renewables," said Merlin Hyman, CEO of the project developer Regen SW http://www.regensw.co.uk/.

Volker Buddensiek

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