Are new gas-fired power plants the ‘bridge fuel’ to a low carbon future?

By Jon Crooks

Over the course of the next three days, I’m going to produce a series of three blogs examining the prospects for UK energy policy. By this I specifically mean the power sector (how we generate our electricity). In this first one I’m looking at the role of gas power plants

 

As ever, it’s worth first looking at the longer-term perspective in terms of the UK’s low-carbon transition. In this respect, the good news is that 2015 saw record contributions from low-carbon sources to the electricity generation sector, as Carbon Brief recently concluded, but the UK still relies on fossil fuels for 54% of its power generation needs.

“The UK’s fifth carbon budget, recently passed into law, will require the power sector to be largely decarbonised by 2030. Meanwhile, the Paris Agreement on climate change means the UK has pledged, along with almost 200 other nations, to almost completely decarbonise all energy use soon after mid-century.” – Carbon Brief

With this in mind, Amber Rudd’s announcement last November that power generation in the UK from coal would be phased out by 2025 and the principle replacement would come from new gas-fired power stations, raises some serious questions. A report from the UK Energy Research Centre (UKERC) in February 2016 asked a similar question:

“Can gas, by substituting for coal, act as a ‘bridging fuel’ to a low-carbon UK energy system and, if so, how much gas use does such a bridge entail, and over what period of time?”

The advantages are clear. Natural gas has significantly lower CO2 emissions on combustion per unit of energy delivered than coal or oil. Also, as building  experts at EC Harris point out, Combined Cycle Gas Turbine plants (CCGT) also combine the benefits of proven technology, flexible load capacity (their output can be adjusted relatively quickly to meet demand) and being relatively predicable in build and cost.

The other key argument is that CCGT can be used to improve security of supply during the period where low carbon technology is being developed and it can be used to meet peaks in demand, even when the sun isn’t shining and the wind isn’t blowing.

Historic trends

Looking back, the substitution of coal by gas in the UK’s energy system has been happening since the 1980’s, as this diagram shows:

infrastructur_660

Thirty two CCGT plants were given the go ahead between 1990 and 2013.

Current trends

The report by UKERC in February 2016 suggested that there was some scope for this to continue:

These substitutions meant that by 2014 the share of coal in UK primary energy consumption had fallen from 40% in 1970 to 16%, while gas use had increased from 5% to 47%. Of the remaining coal use in 2014, nearly 80% was in the electricity sector. Replacing this immediately with 30 GW of CCGTs, operating at the 40% load factor that was the average for such power stations over 2010-2014 could reduce emissions by over 80 Mt CO2-eq per year. This is a significant reduction, exceeding the emission reductions required under the 3rd carbon budget covering the period 2018 to 2022.

You can see the attraction. However, the report goes on to say:

“After 2025, if the carbon targets are to be cost-effectively met, the use of gas in power stations would need to decline, especially if they were not fitted with CCS… This would raise questions as to the economic viability of investing in these gas-fired stations, rather than low- or zero-carbon power generation, in the first place.”

The UKERC report concluded that gas is unlikely to act as a cost-effective ‘bridge’ to a decarbonised UK energy system. Their analysis showed that gas could only act as a bridge from 2015-20 and is…

…more likely to provide a short-term stop-gap until low- or zero-carbon energy sources can come on stream. 

However, according to recently published figures from the new Department for Business, Energy & Industrial Strategy (BEIS), we can see that renewables share of the electricity generation sector was up five percentage points in 2015 while coal-fired power generation continued to plummet.

Chapter_5_web-page-007 (1)

Source: Electricity: Chapter 5, Digest of United Kingdom Energy Statistics (DUKES)

Electricity generated from coal reduced in market share by a massive 8% from 30% to 22% and gas remained relatively steady. The winners were the renewables sector, increasing its share from 19% to 25% and nuclear increasing from 19% to 21% as some capacity came back on line. The take home message from this is clear. Based on current trends, renewables is successfully filling the gap left by coal, not gas.

Methane leakage

Whilst CO2 emmisions from gas-powered plants may be lower than coal, methane leaks could mean that gas emerges worse than coal in emissions terms overall. Global methane emissions have been rising continuously since 2007.

The Aliso Canyon gas leak in California, which was eventually plugged after nearly four months trying to contain it, brought new attention to methane. The gas is roughly 86 times as potent as carbon dioxide as a driver of climate change over a period of 20 years, or 35 times as potent over the span of a century. The Aliso leak spewed enough methane into the atmosphere to equal the greenhouse gases emitted by more than 440,000 cars in a year.

In fact, an emphasis purely on long-term solutions and mid-century goals can obscure the fact that the worst effects of climate change may become irreversible if we don’t take aggressive action now. Controlling methane emissions is said to be the single most important move we can make to alter the near-term trajectory of climate change. Methane emissions cause one quarter of the increased warming we are currently experiencing. 

New CCGT power stations

As UKERC have pointed out, if new gas-powered stations are to be built, they will need to operate on lower and lower load factors, which is something that investors will doubtless take into account in their decision whether to invest. This means that new gas-fired power stations, like nuclear, needs significant and long term government subsidy in the form of future returns if they are to be built.

GE Power and DF Energy are building a new gas-fired power station in Carrington, Greater Manchester for Carrington Power. The 880MW power plant will enter commercial operation  in 2016 following the three-year construction period and will generate enough electricity to supply the needs of around a million homes. This is new fossil-fuel infrastructure, capable of operating well into the 2030’s, long after we should have decarbonised our power sector.

In contrast, perhaps reflecting the new realities, newer projects may be struggling to get off the ground. Energy firm Carlton Power was awarded a subsidy contract by the Department of Energy and Climate Change last year to build a new 1.9 GW  plant at Trafford in Greater Manchester – big enough to supply power to 2.2 million homes. The £800 million plant was due to start generating in October 2018, but Carlton Power has said it can no longer meet that date and has so far failed to secure financial backers for the project to go ahead at all, and this despite government subsidy.

Conclusion

Why waste taxpayers money on long-term subsidies of this kind when it is proven that renewables are already taking up the majority of the lost coal-powered capacity and we won’t even be able to make use of these new gas power plants beyond 2025-2030?

Yes, we need baseload power to iron out the fluctuations in supply from wind and solar, but this can be achieved in other ways.

Much will depend on other developments in the wider energy system – such as new nuclear, the scale of renewable energy deployment and the availability of key technologies, but these developments are already taking place.

Whilst the debate around what should make up our energy mix in the future will rage on and the UK Government must not back down from its commitment to remove all coal-fired power generation by 2025, equally, policy makers must think very carefully about how best to replace that capacity. A further ‘dash for gas’ may provide some short term gains in reducing CO2 emissions, but it would not be the most cost-effective way of doing so and methane leaks could represent a far worse problem.

In the upcoming second blog of this series, I will begin to consider whether a transition to 100% renewable energy is possible without building any new fossil fuel or nuclear capacity… 

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