How Britain Ended Its Coal Addiction

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At Aberthaw Power Station on the coast of South Wales, Tom Glover examines a dwindling pile of coal for what may be the last time. At its peak in 2013, the coal-fired power plant generated enough electricity to keep the lights on in 3 million homes every year.

But today—after almost half a century in operation—all is quiet. The furnaces are not running, there are no plumes from the smokestack, and there is no soot resting on the vehicles in the car park. The plant is simply trying to use up its remaining stockpile of coal before it closes for good early next year.

“You do get nostalgic, definitely,” says Glover, who is the UK head of German utility company RWE, which owns Aberthaw, and who was once responsible for buying coal for the plant. “This was my favorite power station,” he says, pointing out the conveyor belts that move coal around the plant. “It’s a place with a lot of engineering.”

The fate of Aberthaw is a harbinger of what is to come as the UK—once the world’s largest coal consumer—prepares to end its addiction to the planet’s most polluting fossil fuel. It is one of only five operational UK coal-powered stations after Cottam in Nottinghamshire was closed on Monday after 50 years. By next summer, only three will remain.

For those employed at the plants, the closures can be devastating. But for environmentalists, it will be another victory in their global fight against coal power, which is still the world’s biggest source of electricity.

When Aberthaw opened in 1971, conventional coal and oil power plants accounted for 88 percent of electricity supplied to the UK market. Last year, coal’s share had shrunk to just 5 percent. And between April and June this year, it fell to an all-time low of just 0.6 percent.

This accelerated decline is explained partly by the government’s decision to slap an expiration date on the industry, announcing in 2015 that it would stamp out coal power entirely within a decade.

Earlier this year, Britain clocked up its first fortnight without coal power since 1882. And since 2008, the UK has cut the carbon content of its electricity generation at the fastest rate of 25 major economies, ahead of Denmark, the U.S. and China, according to Imperial College London and energy consultancy E4tech. 

Its transformation from coal powerhouse—as recently as 1960, coal mining employed more than 600,000 people—to almost coal power-free is hugely significant at a time when countries are grappling with how to meet the 2015 Paris climate deal to limit global warming to well below 2 degrees Celsius. To achieve this, global emissions of carbon dioxide should already be declining by 3 percent a year—but instead, they are still rising, reaching a record high in 2018.

The EU is pushing for a bloc-wide target to cut net CO2 emissions to zero by 2050—a target the UK committed to law this summer. Yet some member states are still heavily reliant on the fuel. Poland, for example, still draws 80 percent of its electricity from coal-fired plants. And in Germany, the biggest coal consumer and biggest power producer in the EU, coal accounted for just over a third of power generation last year.

“The British experience shows that any country can actually do it [end coal power], it’s a question of putting the policies in place to do it,” says Richard Black, director of the Energy & Climate Intelligence Unit, a UK environmental think-tank. “Had Germany decided to tackle coal first rather than nuclear [which it has committed to phasing out by 2022], I think Germany could be in a similar position to the UK.”

The Rise of Natural Gas

Less than an hour’s drive from Aberthaw, near the village of Felindre in South Wales, is a remote location hedged by green fields and trees that offers a clue to why coal is no longer the dominant fuel in Britain’s power sector. Drax, a FTSE 250 power company, whose heritage is steeped in coal, has won consent from the government to build a natural gas plant at the rural location to help meet gaps in electricity demand.

Since Britain’s first centralized natural gas plant was commissioned in 1991, the fuel, which is less polluting than coal, has become the biggest single contributor to power generation in the UK—accounting for almost 40 percent in 2018. 

“The dash for gas in the 1990s is huge as far as the coal decline is concerned,” says Richard Howard, research director at Oxford-based consultancy Aurora. By then, Britain had a domestic offshore oil and gas industry in the North Sea offering plentiful supplies. And coal had already been phased out from other key parts of the economy. Steam trains had been replaced by diesel. Homes, once heated by coal, were fitted with modern gas boilers.

In 1991, the EU lifted restrictions on the use of natural gas for power generation. The move proved a catalyst and came just 12 months after Britain’s electricity system had been privatized, leading the newly private enterprises to build gas-fired power stations that had lower capital costs rather than coal.

Josh Burke, policy fellow at the Grantham Research Institute on Climate Change and the Environment, says a “confluence of market drivers and regulatory interventions” have worked together since the turn of the decade to push coal off the system. 

European and domestic legislation to tackle emissions have ensured that coal plants have become increasingly uneconomic to run or build. In the UK, no new coal plants can be constructed without expensive carbon capture and storage technology.

Burke cites 2013 as a particularly critical turning point, when the UK became the first country in the EU to introduce a carbon price support, a tax paid by companies that generate electricity from fossil fuels, which severely weakened the investment case for coal. The tariff, priced at £18 a tonne of carbon dioxide, was designed to top up Europe’s emissions trading system, through which energy companies buy permits to emit carbon. 

“The moment the carbon price went up, coal went down dramatically,” says Burke. “It tipped the economics in favor of natural gas.”

Renewables: Favoring Cost-Efficient Power

Drax’s main power station covers a 2,500-acre site near the North Yorkshire town of Selby. The largest power plant in the UK, it was also the biggest polluter in western Europe. Once run exclusively on coal, four of the plant’s six generating units have been converted to biomass—burning wood pellets to produce energy.

Last year, renewables, including biomass, produced a third of the electricity generated in the UK. By 2030, ministers want 30 gigawatts—a third of all electricity—to be sourced from offshore wind alone. 

Once built, renewables such as wind and solar have low running costs. When generating, they come first in the so-called merit order—a sequence that dictates how demand for electricity is met by which source of supply. The most cost-efficient sources take priority. Coal, which has high marginal costs of production, has been pushed down the order to the point where it is rarely needed, particularly as energy demand has fallen in recent years helped by more energy efficient appliances. Low gas prices compared to coal have also played a part.

“If I were a betting man,” says Will Gardiner, Drax chief executive, “the likelihood that we might run [coal] past 2023 is extremely low.”

Critics of UK energy policy cite a recent blackout in England and Wales to argue that the electricity system has become too reliant on intermittent sources of supply such as solar and wind, which are vulnerable to changing weather conditions compared to traditional coal and gas plants that take longer to slow down and therefore act as a brake on the system. 

But while the complexity of the electricity system has increased, “so have the tools and the resources that have become available to manage it,” such as batteries that respond rapidly to help smooth out any volatility, says National Grid, the company in charge of matching electricity supply and demand in Britain. 

Renewables are now second only to gas in terms of power generation in the UK. Nuclear is responsible for a further 19.5 percent. Although Britain is building a new nuclear power station at Hinkley Point—the cost of which has risen by almost £3 billion—all but one of the country’s current reactor fleet will have to be retired by 2030.

A government white paper—which the industry and environmentalists had hoped would show how the UK planned to reduce emissions while also satisfying increased demand for electricity—was delayed shortly before Boris Johnson became prime minister in July.

Kwasi Kwarteng, who became energy minister in July, says that the government doesn’t see the country’s reliance on gas as a “problem,” citing its potential use in the manufacture of hydrogen, considered a cleaner fuel.

Still a Need for Coal Mines?

A century ago, coal mining employed 1.2 million people in Britain. Now, just a handful of producers remain—a decline that has come to be symbolized by the pit closures that triggered the 1984-85 miners’ strike. In 2018, UK coal production, down by 95 percent since the 1950s, fell to just 2.6 million tonnes.

Yet even when Britain quits coal power generation, heavy industry will still need the fossil fuel to manufacture products including steel and cement. The majority of that demand is met from imports. In the first three months of 2019, the UK imported 2.6 million tonnes of coal; the biggest single source was Russia. Indigenous production was just 592,000 tonnes. 

UK producers, such as The Banks Group, argue the country’s remaining demands should be met by domestic supply and are still trying to open new mines but are often faced by environmental opposition. Otherwise, they argue, the country is forgoing both economic benefit and control over environmental standards.

“The UK currently needs between 5 million and 6 million tonnes of coal just to continue supplying a range of essential industries, including steel and cement manufacturing,” says Mark Dowdall, environment and community director at The Banks Group. “Around 80 percent of the UK’s need for coal is currently met through imports, increasingly from the U.S. and particularly Russia, and the greenhouse gas emissions of importing coals from these countries is significantly higher than producing it in the UK.”

In March, the UK’s first deep coal mine for more than 30 years was given the go-ahead by Cumbria County Council in northwest England. The £180 million Woodhouse colliery, on a coastal site in West Cumbria, is scheduled to open in 2022 and will produce 2.4 million tonnes of coal a year for use in both the domestic and European steel industry.

In the longer-term, heavy industrial users know they, too, will have to find substitutes for coal, yet they warn solutions are still a ways off. Research into alternatives needs time, finance and UK government support. 

‘We Have to Bite the Bullet on This’

“Ultimately, making steel and emitting carbon isn’t acceptable; we have to bite the bullet on this,” says Chris McDonald, chief executive of the Materials Processing Institute, an industrial research centre with close steel industry links. “It’s no good saying we’ll tax the carbon to death, because then you’ll just kill the industry in the UK and the carbon will still be emitted somewhere else in the world.”

UK Steel, a trade association, says that in 2018 the country made 7.3 million tonnes of crude steel. Of this, 5.7 million tonnes was made via the basic oxygen steel furnace process which needs coking coal to drive oxygen out of iron ore to create steel used in sectors from construction to automotive and aerospace. 

Steelmakers believe carbon capture usage and storage, could be an option to meet decarbonisation demands but it is far from a quick fix. Kwarteng concedes that the government has “dragged its feet” in the area.

Glover sees what is happening at Aberthaw as a mirror for the changes taking place across Europe as it tries to cut carbon from its economy.

“It is quite a good microcosm for how the shift works,” he says. He points out how challenging these changes are for employees, particularly in areas that are already economically depressed. “It’s the hardest thing in the energy transition,” he adds. “We’ve got a lot of staff . . . we’ve got responsibilities to the communities that we are in.”

Back in his Swindon office, Glover has two pictures of Aberthaw on the wall. One shows him standing on top of the coal pile, while the other is a sunset shot of the power station. “It will stay on my wall when I put my wind farms up, as well,” he says.

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