In Tony Lodge's January 2012 report "The Atomic Clock", he made a number of recommendations aimed at meeting demand amid worrying predictions for future shortfall of energy for UK households.
"The Coalition should revise its ‘capacity payments’ mechanism to guarantee some of this under sentence ‘baseload’ plant is maintained and available when required while new nuclear and clean coal is under construction."
Today, The Independent report:
"Britain’s dirtiest coal power stations are to be allowed to bid for hundreds of millions of pounds’ worth of subsidies that could allow them to stay open well into the 2020s. Senior ministers are so worried about the possibility that the UK could suffer electricity blackouts over the next few years they have agreed to let Britain’s coal stations bid for “capacity payment” handouts – paid for through people’s energy bills – which could allow them to upgrade their facilities. If successful, the money would help make coal generation economic well into the 2020s – but significantly reduce the UK’s ability to cut its carbon emissions.
The move comes at a time when energy experts are predicting a renewed future for coal, despite the fact that it produces double the amount of CO2 as gas generation. In April 2012 coal took over from gas as Britain’s dominant fuel for electricity for the first time since 2007, driven by a collapse in the international price and a rise in the cost of gas. In addition, the tax the Government levies on companies emitting carbon currently stands at £16 per ton, rising to £30 a ton in 2020. But analysts warn that at the current prices this would have to rise to more than £40 to make such coal generation uneconomic.
Now the Government intends to allow coal stations to bid for three-year capacity payment contracts that they could use to upgrade existing facilities, which will allow them to continue operating beyond 2020, when EU air pollution and acid rain rules come into effect. Analysis by Greenpeace suggests that suppliers could be in line to expect £240m of subsidies per coal station over the three years – even though the improvement would have no effect on the amount of CO2 the plants emit.
Under the Energy Bill, 12 of Britain’s existing 18 coal power stations that could stay open will be exempt from the Government’s emissions performance standard (EPS) that sets limits on CO2 emissions for all new power generation. While the EPS will stop new coal power stations being built without carbon capture and storage, it will not apply to existing plants. That exemption goes against a pledge made by David Cameron in opposition.
Since then, ministers have become increasingly concerned that if too many existing power station come off-line, Britain could be vulnerable to power shortages. Last month, the electricity regulator Ofgem warned that the risk of future blackouts has trebled from the one in 12 chance it estimated last October to just one in four now."