InterGen News

September 2017

UK Government Reaffirms Closure of Coal Power Plants

On September 18 during a trade visit to Canada, British Prime Minister Theresa May reaffirmed the UK Government’s commitment to phase out unabated coal generation by 2025. (Unabated describes power plants that are not fitted with carbon capture and storage technology.)

Following silence on the topic since last year’s consultation, May’s statement is long-awaited and welcomed. Coal is the most carbon intensive fossil fuel – producing twice as much carbon dioxide per unit of electricity as natural gas. The UK Government’s commitment is therefore key to meeting climate change targets and for security of supply as it will encourage the development of new, cleaner, and more efficient gas-fired power plants.

Mark Somerset, InterGen’s VP for Development in the Europe/Middle East/Africa region said, “Greater certainty in the market going forward is key for investor confidence and will put us in a position to negotiate better agreements for our projects and make more informed bids into the Capacity Market. This should lower the price that consumers ultimately pay for security of supply.”

We look forward to more details on the Government’s planned phase out of coal, which are expected to be released before the end of the year, as well as the Cost of Energy Review from academic Dieter Helm, due at the end of October.

With coal now confirmed to be closing, the Capacity Market not yet resulting in new large-scale gas generation, and nuclear plants being more expensive and taking longer to build (especially relative to wind and solar), we need clear direction and a progressive approach from the Government.

InterGen is beginning construction of a 300 megawatt open cycle gas turbine power plant and has 2 gigawatts of new combined cycle gas turbine projects entering prequalification for the Capacity Market auction. If this capacity clears the auction, it can be used to balance the intermittency of renewable generation.

Natural gas-fired generation of electricity is an economical and flexible option, it is quick to construct and with two consented projects ready to go (Spalding Energy Expansion in Lincolnshire UK and Gateway Energy Centre in Essex UK), InterGen is ready to provide the necessary capacity for a lower-carbon future that is free of coal.