Its latest energy trends statistics showed that ‘major power producers’ (MPPs) generated 13.85TWh of power using coal between January and March 2016 – less than half the volume for the same period the previous year.
Decc attributed the precipitous decline to the increase in the carbon price support rate to £18.08 per tonne of CO2 in April last year, as well as plant closures resulting from replacement of the Large Combustion Plants Directive with the Industrial Emissions Directive at the beginning of this year. The conversion of one of Drax’s units from coal to biomass in July also added to the reduction in capacity.
The statistics showed that, as a result of this decline in coal, supply from gas increased by 54 per cent on the year, supplying more than 31TWh of power in the first quarter of 2016.
There was also a 28 per cent increase in the volume of power supplied from bioenergy, which rose to 4.79TWh, largely due to the Drax conversion.
A reduction in average winds speeds meant generation from wind was down 3.8 per cent to 9.4 TWh. Offshore generation increased by 10 per cent to 5.14TWh, but failed to offset a 16.4 per cent reduction in onshore generation.
The closure of Wylfa in December led to a 4.6 per cent reduction in nuclear generation to 15.75TWh.
Over the period 18 per cent of electricity supplied by MPPs came from coal-fired generation – a record low for the fuel. Gas-generation provided 40.4 per cent of supplies; nuclear 20.5 per cent; and renewables (wind, hydro, solar and bioenergy) 21 per cent.
Imports via interconnectors reached a record high, supplying 6TWh of power in the first quarter of 2016 – up 22.3 per cent on the same period last year. March also saw a record monthly high for interconnector imports of 2.2TWh.
According to a recent study by price reporting firm ICIS, gas generation is all set for a “comeback” as the carbon price floor and low gas prices make coal less economic by comparison. They said up to 15GW of new gas plants could come online over the next five years.