DECC's coal confusion: A shot in the foot
Ministers stir up 'unabate debate' by hinting at holes in the coal phase-out
By Richard Black
Q: What’s the similarity between the Department of Energy and Climate Change and Nick Gardner of indie band San Cisco?
A: Both show a recent propensity for shooting themselves in the foot.
For Gardner, the scene last year was a dirt road in Western Australia; a few too many bumps in the road, a jolt on the gun, a self-administered wound.
DECC’s latest mishap came on what should be its safest piece of ground – the coal phase-out.
Last year, having (jointly with Treasury) taken a blowtorch to the government’s low-carbon support measures, and struggling to find something that could bolster its ‘greenest ever government’ credentials ahead of the Paris climate summit, Secretary of State Amber Rudd announced in her ‘energy reset’ speech that all of the UK’s coal-fired power stations would close by 2025 at the latest.
Cue ringing applause – not only from green groups but from energy experts who believed the announcement would stimulate investment into various essential elements of the UK energy system, in particular new gas-fired power stations designed to keep the lights on at times of peak demand.
And Ms Rudd – and indeed David Cameron – had something concrete on which to base their claims of climate leadership before, during and after Paris; a coal phase-out to wave in the face of those sanctimonious Germans who, for all their wind and solar, remain overly reliant on the brown stuff.
Holes in the phase-out
Those of us who listened carefully to Ms Rudd realised that the phase-out commitment was less concrete than you might have guessed from the headlines.
Firstly, it would only happen if ministers were satisfied there would be no threat to energy security. And secondly, the pledge was to phase out ’unabated’ coal, not all coal.
What none of us realised is that we would now be having a debate about what ‘unabated’ means.
Yet as The Independent reported on Thursday, that’s what Energy Minister Andrea Leadsom appears to be encouraging. According to leaked minutes of a recent meeting [pdf link], she is encouraging coal barons (who knew the UK still had any?) to go away and have a think about what they would like ‘abated’ and ‘unabated’ to mean. They’ll feed their thoughts into the consultation on how to do the coal closures that DECC was supposed to launch in the spring but which now appears stuck in the pre-EU referendum ‘too difficult’ tray.
While Ms Leadsom hasn’t revealed exactly what she has in mind, the logic appears to go something like this:
- ‘abated’ usually means ‘stations fitted with carbon capture and storage (CCS) equipment’
- CCS captures perhaps 90% of carbon emissions, not all
- so, could any other way of using coal that reduces emissions by 90% or so be considered ‘abated’?
Could ‘abated’, for example, mean that biomass-burning power stations could use up to 10% coal? Given that coal is conventionally thought of as a baseload technology, could ‘abated’ mean ‘stations operating for less than 10% of the time’?
It seems vanishingly unlikely that we will get any answers to this before the referendum, given that Amber Rudd and Andrea Leadsom have positioned themselves in opposite camps in this increasingly poisonous battle. Political pundits seem to believe that at least one of them and in all probability both will be moving jobs after the referendum, whatever the result.
Black vs gold
It’s striking to compare DECC’s approach to the coal and solar industries. Coal is unequivocally becoming an industry of the past, while the International Energy Agency and others see solar playing a major role – perhaps the major role – in energy systems of the future.
Ms Leadsom appears to have been highly sympathetic to the coal industry, encouraging them to engage in what ‘unabated’ means, asking her officials to intervene with the Environment Agency on behalf of a company seeking to open a new mine, and discussing options for re-skilling the workforce.
Coal-mining and coal-burning employ at most 7,000 people in the UK. The solar industry (until recent policy changes) employed about three times that many. Yet when representative of this industry of the future approached DECC last year to talk about jobs, the answer was basically ‘you’re on your own’. Tlc for the 7,000, tough titty for the 20,000.
More pointedly, casting new doubt on the solidity of the coal closure plans is a daft thing for DECC to do, even in the context of its own priorities.
Most immediately, energy security is directly undermined by failure to renew infrastructure. The Notification of Inadequate System Margin (NISM) that National Grid issued last November was caused when several coal-fired units failed at a time of low wind speeds. Last month’s NISM occurred when seven significant sources of power [pdf link] (three coal units, three gas units and one interconnector) were simultaneously unavailable when needed; all but one are a long way past the first flush of youth.
Amber Rudd said in her ‘reset’ speech that the sheer age of coal-fired power stations was a major reason for phasing them out. We have, she said, ‘…a legacy of ageing, often unreliable plant… it cannot be satisfactory for an advanced economy like the UK to be relying on polluting, carbon intensive 50-year-old coal-fired power stations.’
Fitting CCS to a 50-year-old coal unit isn’t going to increase its reliability; nor is any kind of deal for vastly reduced running time. In fact, the latter would be potentially damaging in that peaking plants are needed at times of highest stress on the grid – which is exactly when you most need plants to be reliable.
So is the invitation to define ‘abated’ about encouraging new coal-fired stations, which presumably would be more reliable? This seems highly unlikely, given that such stations would be direct competitors to the peaking gas plants that the government wishes to encourage.
All in all, then, it’s a bit of a muddle, and one that DECC didn’t need to create. It creates yet more uncertainty at a time when investors are crying out for clarity. As the Energy and Climate Change Committee concluded recently [pdf link]; ‘Policy inconsistency and contradictory approaches have sent mixed messages to the investment community about the direction of travel’.
This has led to a reluctance to build new energy infrastructure and has made building more expensive, potentially adding £120 per year to the average household bill. Just today 11 major renewables companies have pledged virtually to halve offshore wind costs – if governments maintain a stable, predictable raft of policies.
If the ‘unabate debate’ isn’t a further mixing of the message, I don’t know what is. If anyone can explain how raising the prospect of a coal continuation will do anything to potential investors in gas-fired power stations other than to make them think again, please let me know.
Nick Gardner, in case you’re wondering, was able to get back on the road after a brief interlude for surgery. The road forward for DECC, given the political realities of our time, appears a little more tortuous; and self-inflicted wounds really don’t help.