WIND OF CHANGE SEES THE CONTINUED DEMISE OF COAL

The country’s demand for electricity last year was fuelled by a continuing rise in output from renewable sources as coal-fired generation continued to fall.

As a result, renewables generated almost as much power as nuclear sources during 2015, causing fossil fuels to be responsible for around half of total power generation, compared to over 75% only five years ago.

These are the topline features of the latest GB Electricity Market Summary by energy market specialists EnAppSys*.

Despite a fourth quarter increase in coal-fired power generation as a number of coal units returned to service following maintenance outages, coal’s contribution to GB’s electricity generation fell to its lowest level since 1951 – a period when overall power generation was much lower.

During 2015, total generation from coal fired-power stations fell to 74.5TWh (8.5GW) during the year, representing 24% of total generation (down from 31% in 2014).

As a result of this fall, coal was displaced as the primary source of electricity by gas-fired power stations, which contributed 84.4TWh (9.6GW) of electricity, representing 27.2% of overall generation.

However, the primary position of gas in the fuel mix masked an overall fall in gas generation of 46.2% from 2010, when levels of renewables were much lower and coal prices were significantly higher.

Overall, during 2015 Britain’s fuel mix was provided by CCGT (gas) plants (at 27.2%), coal (24%), nuclear (21.1%), renewables (21.0%) and interconnectors (6.7%).

The EnAppSys report shows that the significant growth in renewables seen in recent years continued in 2015, with wind power the dominant contributor at 32.4TWh fuelled by an increasing contribution from offshore wind farms.

The rush to meet subsidy deadlines saw solar PV also increase its contribution significantly to 7.1TWh, and biomass also saw further growth, with the continuing conversion of units at Drax from coal.

With the rise of renewables, and the contribution of interconnector supplies from outside the UK, the overall level of fossil fuel generation has now fallen by 39% over the past five years, from 259.8TWh to 158.8TWh.

This represents an overall fall in the share of total power generated from fossil fuels to just over 51% during 2015 – leading to an estimated reduction in the country’s carbon emissions (excluding interconnector supplies) from electricity generation to around 88.7Mt, compared to an estimated 106Mt in 2014.

Against this changing fuel mix picture, overall power generation levels have continued to fall – largely as a result of energy efficiency measures, contraction by large industrial users and the increasing use of local distribution that does not rely on power transmission through the GB network.

In fact, the total of 310.58 TWh of electricity generated during 2015 (representing an average daily demand of 34 GW) represents a near 9% fall over the last five years from 340.3 TWh (37.25GW) in 2010.

Paul Verrill, director of EnAppSys, said: “The ongoing closure of coal stations and the Government’s stance against them perhaps marks the end of an era for coal stations which have dominated the GB power market since its inception, with coal-fired generation at its lowest level since 1951.

“Since 1948, coal fired power stations have provided over half of the country’s electricity generation, but this picture is now changing rapidly with the growing emergence of wind, solar and biomass.

“Renewable sources now provide almost as much electricity as nuclear plants and are expected to overtake them during 2016 as Wylfa nuclear plant closes and as new wind and solar projects come on stream.

“These changes in generation have also had an impact on supply margins and prices. Although the greater reliance on renewables has caused occasional tight supply and demand margins, leading to some rare but spectacular balancing price spikes, the overall impact on the grid has been manageable.

“GB network transmission restrictions have meant that in 2015 the UK missed opportunities to further reduce carbon emissions as renewable generation has been curtailed particularly through December, but 2016 sees increased transmission capacity in the North of Scotland and construction ongoing on the Western link between the South of Scotland and England.

“With the UK’s carbon floor price causing profit margins at coal plants to decline despite low coal fuel costs, the GB electricity fuel mix looks set to continue with high levels of renewable generation and declining gas and nuclear; with gas and imports from the continent helping balance any differences between supply and demand.”

*For the full 20154 and Q4 2015 reports, please visit the following page on the EnAppSys website: http://www.enappsys.com/news_and_rep/summary_reports.jsp

www.enappsys.com