Britain's coal plant closure plan could risk power supplies - report

LONDON (Reuters) - Britain’s plan to close coal-fired power plants by 2025 has come under scrutiny from engineers who warned on Tuesday it could contribute to electricity supply shortages.

The sun rises behind Fiddlers Ferry coal fired power station near Liverpool, northern England, December 15 2008. REUTERS/Phil Noble

Under a business as usual scenario, the country’s electricity supplies “can only be secured by granting an extension to existing coal-fired power stations,” a report by the Institution of Mechanical Engineers said.

In a bid to meet its carbon emission targets, the government announced plans in November to close polluting coal-fired power plants and replace them with gas plants by 2025.

Coal plants provided more than a quarter of Britain’s electricity in the first nine months of 2015, government data showed, and experts warn that new plants are not being built fast enough to compensate for the planned closures.

According to the report from the engineers institute, if the coal plant closures are combined with the shuttering of ageing nuclear plants there could be a supply gap of 40-55 percent, based on current typical supply.

“If we get to 2023/4 and the lights are flickering then of course you would expect the government to step in and say plants can stay open,” said Peter Atherton, energy analyst at investment bank Jefferies.

The report said Britain would need to build about 30 new gas plants in less than 10 years to plug the gap, and that looks unrealistic given current weak electricity prices.

Even before the government’s announcement in November, many older coal plants were expected to close by the middle of next decade. But the operators of seven plants capable of generating a combined 13 gigawatts (GW) - or four times the planned Hinkley C nuclear project - have left the door open to keeping them running longer.

SSE, Drax, E.ON, EDF Energy, RWE and Engie all chose this month to put some of their coal plants into a government scheme which means they could be modified in due course to meet emissions targets under the EU’s Industrial Emissions Directive (IED).

Plants that have not been earmarked for possible changes must be closed by 2023 at the latest.

“The decisions by the operators raise the possibility that some of these plants could still be running in 2023 and beyond in conflict with the government’s plans,” said Ali Lloyd, senior principal consultant at the consulting and engineering firm Poyry.

“The government will need some kind of legislation which effectively bans coal in order to make them close,” he said.

A spokesman for Britain’s Department for Energy and Climate Change said it would carry out a consultation this spring on its proposals to shut the coal plants.

Editing by David Clarke