Unsurprisingly, there was jubilation in some circles at the UK government’s yesterday that all coal-fired power stations in the country will shut by 2025 unless carbon capture systems are developed.
That’s a natural reaction, given their polluting nature, although there are legitimate questions as to how much this is due to policy, and how many of them would have closed anyway due to age and environmental regulations.
Advertisement
But the really important question is: what will they be replaced with? The new gas-fired power stations will take up most of the slack.
These produce a fair bit and so, in theory, it looks like an environmental gain for a nation that is committed to meeting its legally binding carbon emission targets. But there is a very large catch.
The problem is private investors will only build new power stations if they think they will get their money back, plus a profit. For gas-fired stations that normally means running them at close to full capacity for 30 to 40 years.
But if the fleet the government has in mind do that, then the UK’s long-term carbon emission reduction targets will be missed.
Missed targets
Either the government needs to accept this, and renege on the targets, or it needs to expand renewables and commit to pay operators of the new gas-fired generators to keep their plants going even if a few years down the line they have to be idle some, or even all, of the time.
The danger is that investors, wary of such risks, will seek larger payments from the government to build the power stations than the government says it is willing to pay. Consumers may find the bill ultimately gets passed to them in higher electricity costs.
This situation highlights what are perhaps the most important results of this government’s foray into energy policy since it was elected six months ago: uncertainty and loss of trust.
This is no surprise. In that time it has pushed up the cost of renewables by including them in a on fossil fuels and cancelled, without consultation, a decade-old to make new homes effectively zero carbon in terms of emissions.
It also ended the obligation for energy suppliers to source ever more electricity from renewables a year early and by 87 per cent. So who would believe anything that comes from a minister about 2025, if such belief involved putting cash on the table?
It is the damage to investor confidence that will be the main legacy of this government’s first six months in office. Assuming carbon targets hold, this will cost the electricity consumer dear.
Image credit: John Eveson/FLPA/ImageBROKER/Rex Shutterstock
