The UK’s Department of Energy and Climate Change (DECC) has published its official departmental plan, to take into account the period from 2015 to 2020.

It has set a limit of £3.3bn of total departmental expenditure in 2015/16 and a vision for “secure, affordable and clean energy supplies”.
Department of Energy and Climate Change
The document has been well telegraphed, and confirmed its position with regard to coal-fired power, but also included prioritising the facilitation of gas-fired power through a review of the current capacity market design.

“One of the most cost-effective contributions we can now make to further reducing emissions in the power sector is replacing coal-fired power stations with gas,” the strategy states. “We will consult in spring 2016 on proposals to close all unabated coal power stations by 2025 and restrict their use by 2023, if we are confident that enough new gas generation will come forward to ensure security of supply.”

 It confirms plans to bolster energy security by reviewing the Capacity Market to “ensure it provides the right investment incentives for new gas plants to be built in the UK”, supporting new interconnectors, delivering a “significant expansion” of new nuclear capacity, considering new smart technologies for energy storage and demand response, and supporting the “safe development of shale gas”.

In re-designing the capacity market, Rob Lalor, analyst with the EnAppSys energy data agency framed the challenge the government faces in keeping the lights on while incorporating more and more renewables, particularly from the offshore wind sector, as older combined cycle gas plants get squeezed out.

Lalor told Power Engineering International: “If you want to ensure that new CCGT plants get built, you need to pay them a subsidy that makes up for the lack of generating opportunities resulting from increased levels of renewable generation and if the aim is to increase margins you also need to secure the future of all the existing plants in the market in addition to securing new build projects (otherwise they will close much like the plants currently on the margins of the market have). All this costs money so it really is a case of deciding how much to spend and on what to spend that money.”

“As nuclear and coal plants close that will create opportunities for new CCGT builds but this will be diminished by any nuclear new builds that reduce the size of their future market. There are a number of different approaches to managing a high-renewables future and it is really just a case of deciding how that future will look, how best to achieve it and what you want to spend your money on.”