According to the latest market report by EnAppSys, gas fired plants increased their power contribution by nearly a third from the end of 2015. With gas prices falling and coal fired stations closing, generation from coal during the three month period was also lower than both nuclear and renewable sources.
In 1Q16 gas (CCGT) provided 35.4% of the country’s electricity at 29.68TWh (13.7GW). This was followed by renewables at 22.4% which generated 18.78TWh (8.7GW), nuclear at 19% and generating 15.98TWh (7.5GW), coal at 16.2% generating 13.56TWh (6.3GW) and imports at 7.1% generating 5.92TWh (2.8GW).
This position is a marked improvement from the previous year, when there was almost 50% more generation from coal than from gas. In 1Q15, coal generated 28.7TWh (13.3GW), against an output of 19.65GW (9.1GW) from CCGT plants.
The turnaround reflects the poor economic conditions for coal generation. Further anticipated coal closures have been forestalled by the recent offer of supply contracts to both Drax and Fiddler’s Ferry by National Grid as part of its efforts to maintain the country’s generating margins for winter 2016/17.
Paul Verrill, a director of EnAppSys, stated: “The government has sent out the message that unabated coal will play no role in the market beyond 2025. With this message as a backdrop and with coal stations in the UK paying much higher carbon costs than stations on the continent, many coal stations have taken the decision to close earlier than anticipated. The government has previously declared an intention to get new CCGT plants in place to offset the coal station closures, but obviously this is not going to be possible ahead of winter 2016/17. As a result, the ancillary service contracts recently awarded to Drax and Fiddler’s Ferry will play a role in securing additional capacity for the next 12 months and this should reduce the risks of supply shortage.”
Overall, following a mild weather end to 2015, levels of power demand climbed by 18% during 1Q16. Despite this increase, with power availability levels also growing, the supply margin was generally very comfortable.
Paul Verrill said: “It has been an interesting start to 2016. However, while the system has generally been well supplied, with wholesale power prices dropping 15% from Q1 2105, there have been some occasions of interesting market activity. For example, the decline in coal’s share of generation is seeing the market relying more and more on intermittent sources of power, increasing the role of ancillary services and storage. At times this has seen National Grid pay millions of pound on tight days to ensure that there is sufficient short-term margin within the system. This has surprisingly come from the coal plants, which had planned to close.”
“One of the biggest issues facing the market into 2016/17 is the cost incurred to maintain margin until the capacity mechanism comes into full force in Oct 2018, and how National Grid and the government achieve this without distortion to market operation that can risk jeopardising investment in new build,” Verrill continued.
Edited from press release by Angharad Lock
Read the article online at: https://www.worldcoal.com/power/11042016/enappsys-gb-power-generation-for-q1-2999/
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