Abandoning Coal Is Only a Start for U.K.
Coal's last days.
Britain, the country whose great coal-burning factories started the Industrial Revolution, now plans to retire nearly all its coal plants. The closures, part of an energy policy "course correction" announced last week, lay down an important marker ahead of the upcoming climate talks in Paris.
The U.K.'s remaining coal-fired power stations will be restricted from 2023 and shut by 2025. Any coal-powered plants that are able to install carbon capture and storage, or CCS, before 2025 would get a reprieve, but so far the technology has been more promising in theory than in practice.
The policy confirms the move away from coal, which now accounts for only 20.5 percent of electricity production in the U.K., down from over 28 percent a year ago. While coal will remain a necessity for developing countries for a long time, there is no reason why developed nations can't wean themselves off it.
The question is what replaces it. U.K. Energy Secretary Amber Rudd has made clear that she wants gas and nuclear to do the heavy lifting, with continued support for off-shore wind, but she has left unclear how she sees the post-coal world shaping up. The government has withdrawn support from on-shore wind and solar, which it says are now more competitive and no longer in need of the extra help. (The government also prefers less intermittent sources -- wind and sun being unreliable in the U.K.)
Rudd said she would like to see renewables bear some of the cost of intermittency -- the cost of balancing out gaps in supply -- but has not explained how that burden-sharing would work. With coal soon out of the picture, it's not obvious how Britain would make up the difference.
The government wants new gas-fired plants, but only one large one is currently being built, and investors haven't exactly flooded in. Britain would need up to four times its current off-shore wind capacity by 2030 to fill the gap. And many of the country's nuclear reactors are being retired with the first of a new generation of plants coming online only in 2025.
So some critics worry the government has closed off too many options too soon, saying Britain could face energy shortages and rising prices. Moreover, they say, the U.K. will be more dependent on imported coal power (a good share of it from Russia), lose skilled jobs and have a less reliable electricity supply.
These arguments tend to downplay both the risks from climate change and the progress made fighting it. That said, critics are correct that the U.K.'s climate policy has gone through a number of confusing changes over the years; investors need more certainty than that.
That's why the best climate policies rely on a carbon tax. Critics may not like that, either. But it's the simplest, fairest and most sensible way to encourage the right investment in secure, affordable and environmentally friendly energy sources.
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