Ben Caldecott is an associate fellow at Bright Blue. Nick Hurd MP is co-chair of the Conservative Environment Network.
We need to significantly improve the reliability of our power system over the course of this Parliament.
This is achievable, and hinges on the managed phase out of our ageing, unreliable coal plants by the end of 2020 and replacing this capacity with gas and clean energy.
The reason for widely reported tight electricity margins last week was that 35 per cent of our coal capacity was offline due to various glitches, urgent maintenance, and issues with ramping up.
This is to be expected given that the UK’s nine remaining coal plants are on average 47 years old and are now prone to accidents, unplanned shutdowns, and require much more upkeep than they once did.
In contrast, our existing and much more reliable gas capacity is underutilised.
According to Aurora, an independent energy research firm founded by Professor Dieter Helm at the University of Oxford and others, 54 per cent of the lost production resulting from closing coal by the end of 2020 would be easily substituted by increased utilisation of our existing gas plants. Load factors would need to increase by just two percentage points.
The remaining gap can be closed by new investment in generation. Aurora have also said that closing coal by the end of 2020 would accelerate the entry of at least 3GW of new gas.
There are plenty of consented new gas projects that did not win contracts in last year’s capacity market auction and more have emerged since that could comfortably deliver new capacity over five years.
Building new gas plants is easy, there are no supply chain bottlenecks, and this new capacity would significantly improve the reliability of our power system.
It would also provide a boost to gas demand that could support the UK offshore and onshore gas sectors, which is a stated objective of the Government.
For these reasons alone, a phase out of coal plants by the end of 2020 is compelling. Security of supply and reliability would be improved, existing gas assets would be used more, new gas plants would be built, and gas demand would support UK gas production.
But there are also other no less compelling reasons.
The first is air pollution. According to a recent study there are 1,600 premature deaths annually caused by air pollution from the UK’s coal plants.
This also causes 68,000 additional days of medication, 363,266 lost working days, and more than a million incidents of lower respiratory symptoms. The NHS bill attributable to this pollution is estimated to be £1.1bn to £3.1bn annually.
The second is energy security: 49 per cent of our coal was imported from Russia in Q1 2015. Do we really want to be buying coal from Russia, and by doing so support the Russian economy? For anyone concerned with energy security, the answer has to be no.
The third is reducing the cost of tackling climate change: in 2014coal plants accounted for 60 per cent of carbon emissions from our power sector.
Eliminating emissions from coal is by far the cheapest way of reducing carbon pollution and can reduce the costs of meeting necessary emission reductions. It is far cheaper than almost any other option available to the UK economy.
Finally, there is a significant political legacy of being the first industrialised country and first to use coal for electricity (since 1882) to be the first major country to completely phase it out. This is something that the Conservative Party can be proud of in the future.
The signal before the Paris climate change negotiations later this month would be significant and it would positively influence the outcome, and levels of ambition from other countries.
The benefits of phasing out coal in a managed way over the next five years are overwhelming: it would ensure security of supply, reduce the costs of tackling climate change, and potentially save the NHS billions of pounds each year.
We urge the government to grasp this political and economic opportunity now.