Spending £130 million to keep coal plants alive during the winter of 2020/21 is a “waste of money” given the government’s plans to phase out all unabated coal generation by 2025.
“Whenever coal comes off the system, gas has got to be built,” Neil Clitheroe, global retail director for Scottish Power owner Iberdrola, is quoted as saying. “So, you can either pay three or four years of £130m [for coal], and then 15 years for gas plants. Or you can just pay 15 years for gas plants and avoid the £130m for four years.”
Nearly 10GW (de-rated) of new combined cycle gas turbines (CCGTs) lost out in the four-year-ahead (T-4) capacity market auction earlier this month, including a 1.47GW plant being developed by Scottish Power at Damhead Creek in Kent. At the same time approaching 6GW of existing coal-fired plants secured contracts.
Clitheroe said the results represent a “huge lost opportunity” as if new gas had won instead of old coal “there would have been about £3bn of investment into the economy and it would have created over 6,000 construction jobs”.
He said new gas plants have other advantages too: “Gas plants are cleaner and more efficient and they are able to start up in an hour, whereas a coal plant takes four hours to get going. Given the amount of renewables on the system, you need more responsive plants.”
You can read previous reaction to the results of the T-4 auction here.