coal power plant renewable subsidies

UK Government announces £290m green subsidies and reaffirms 2025 end to coal

The UK Government has unveiled its latest round of renewable subsidies worth £290m while also setting out the next steps for phasing out coal-fired plants by 2025.

As a way of reaffirming its commitment to scrapping coal power, a consultation has been launched by Department for Business, Energy & Industrial Strategy looking for feedback on how to shut down the remaining coal facilities without causing disruption. 

Since pledging to end the use of coal last year, the fossil fuel now only produces six per cent of the UK’s electricity, and last month solar energy generated more power than coal for the first time.

Analysis found there would be no risk to the security of electricity supplies from cutting out coal, which will save 124 million tonnes of carbon dioxide between 2016 and 2030, the consultation said.

The Government said it wants to give investors certainty over replacement capacity such as gas power, which is a fossil fuel but produces lower emissions than coal.

It also confirmed its commitment to spend £730m a year on renewable electricity projects this parliament and announced a new auction of subsidy contracts worth £290m a year.

The funding will result in enough renewable power from sources such as offshore wind to power a million homes and reduce carbon emissions by around 2.5 million tonnes a year from 2021/2022 onwards, ministers said.

Business and Energy Secretary Greg Clark said: “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.

“This is a key part of our upcoming industrial strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

The auction for renewable subsidies, which are paid for on consumer bills, are for technologies including offshore wind, large-scale anaerobic digestion, biomass with combined heat and power plants, wave, tidal stream and geothermal projects starting between 2021 and 2023.

Subsidies for offshore wind are expected to be between £100 and £105 per megawatt hour (MWh) of electricity, which is lower than previous payments for the technology.

The amount also comes close to the £92.50/MWh being given to the controversial nuclear power plant at Hinkley Point which was finally confirmed in September after months of deliberation. 

On coal, the plans will allow ageing power plants to continue to generate electricity only if they can significantly cut greenhouse gases, for example by installing technology to capture and store their emissions.

Ministers want more gas power plants to take over from coal as they produce lower emissions, and to build a “diverse” energy system with record investments in renewable technology and new nuclear power.

Under the Paris Agreement, the world’s first comprehensive climate deal, countries including the UK have pledged to cut greenhouse gas emissions to net zero in the second half of the century.

Friends of the Earth climate campaigner Guy Shrubsole said: “Coal is a dirty, inefficient and climate-wrecking fuel that belongs in the past.

“The government’s move to consult on its commitment to phase out coal is a good, positive development.”

Paul Massara, chief executive of North Star Solar and former boss of RWE npower, said ending the coal era would speed up investment in new energy technology and called for development of smart grids, renewables and storage systems.

“The evidence now indicates that smart, flexible grids based on renewable electricity supplemented by demand shifting, storage and interconnection will deliver power cheaper than the old model with endless fossil fuel costs - and with far lower carbon emissions and related health issues,” he said.

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