UK Gas Burn Increased By Coal-Fired Plant Closures

Coal continues to be favoured by fuel prices over gas for UK power generation this summer however according to National Grid’s summer outlook report the closure of some coal-fired plants will increase the use of gas compared with last summer.

Coal prices have slowly declined by about $10/t during the past 12 months, while gas prices rose steadily throughout the winter before spiking significantly during March. This was driven by above-average demand and a relatively tight supply position according to National Grid. As a result the outlook for summer 2013 and beyond continues to favour coal burn for power generation despite the introduction of a carbon tax from 1 April.

If the current gas and coal prices are maintained into the summer it will be more economical to generate using coal and this will result in lower demand. This situation was experienced in the summer of 2012 however a number of coal plants are expected to close. This will leadi to a higher dependence on gas to last summer a report said.

There have been several coal-fired and oil-fired plant closures under the EU large combustion plant directive (LCPD) since last summer. Eon’s coal-fired 1,940MW Kingsnorth and oil-fired 1,350MW Grain, ScottishPower’s 1,200MW coal-fired Cockenzie, RWE’s coal-fired 2,000MW Didcot A, RWE’s 1,000MW oil-fired Fawley, and the 120MW unit 13 at SSE’s Uskmouth coal-fired plant. These decreases have been partially offset by the recommissioning of SSE’s 700MW Medway gas-fired plant by May, the commissioning of EdF’s West Burton B gas-fired plant, the start-up of the East-West Interconnector between Britain and Ireland and additional wind power capacity added to the system. This capacity will change through the summer with the expected restart of ScottishPower’s 420MW gas-fired Shoreham plant, the continued commissioning of West Burton B and increasing wind farm capacity a report has said.

As a result the generation capacity has dropped by 2.5GW to 76.6GW since the grid’s winter outlook report. The grid expects minimum generation availability at the time of peak demand to be 47.6GW in the week commencing 1 July and demand levels during summer 2013 are expected to be similar to last summer. For the high summer period of June- August, the peak weather-corrected demand is expected to be 40.3GW against an actual weather corrected outturn of 40.6GW for 2012. National Grid expects a minimum surplus of 13.5GW in the week commencing 13 May.

Following the completion of valve replacement works on the 2GW interconnector between the UK and France that reduced capacity last summer, National Grid has said it expects full availability of continental interconnectors this year with the exception of a 19-day outage on the French interconnector in June. Current commissioning plans indicate that the 500MW East-West Interconnector between Britain and Ireland will be fully available by the summer and National Grid also expects the 500MW Moyle interconnector to also return to full capability having run at 250MW since last summer.