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Coal a major contributor to the UK power mix

Published by
World Coal,


The latest GB Electricity Market Summary by energy data analyst EnAppSys, indicates Britain’s 1Q15 fuel mix was powered by a rise in coal-fired generation.

Coal was the dominant source of power in the first three months of the year, accounting for 33% of Britain’s fuel mix. It had the largest output volumes, outperforming the 9.1GW generated by CCGT plants.

Levels of coal generation rose 8.5% to 13.3 GW in the first three months of 2015. Wind also had high output during the period, reaching a 4.6G W. The EnAppSys study indicated demand remained relatively low throughout the 1Q15 and there was plenty of spare capacity in the power system. This consequently placed downward pressure on prices. Throughout the quarter, prices averaged around £40/MWh.

Levels of nuclear generation (7.8 GW) were up almost 30% on the previous quarter. This was characterised by lower-than-expected output due in part to long-term outages at the Heysham 1 and Hartlepool plants.

Paul Verrill, Director of EnAppSys, said: “Coal was once again the major contributor to the UK power mix, as it was during the first quarter of 2014. With the doubling of the carbon price support in the next financial year, the coal fleet may be under greater pressure in the future, but in the first three months of this year, coal prices were sufficiently low enough to allow coal plants to generate power whenever they were available.”

He continued: “The sharp rise in nuclear generation was not that surprising given the outages that occurred at the back end of last year. This led to lower-than-expected nuclear output in 4Q14 but some of these plants have now come back on stream.

“Generally the first three months of this year were characterised by no major price peaks, which would have disappointed operators hoping for higher prices to boost income at plants running on tight margins. There were brief periods in the quarter when prices rose temporarily but the average market price of £40/MWh is likely to force some plants out of the market and discourage others from entering it.

“Across the quarter a high-efficiency CCGT plant might have had carbon and fuel costs amounting to £35 - 37/MWh with worse economics for less efficient CCGT plants (up to £50/MWh for plants on the margins of the market).

“At these prices even the best CCGT plants can only hope to make tight margins, with a challenge ahead for large CCGT new-build plants to demonstrate an attractive return even with capacity payments on the horizon.”

“The general drive to move thermal generation from the higher emitting coal stations to newer gas fired stations is going to need significant growth in carbon costs and static or falling gas prices”

Edited by Harleigh Hobbs.

Read the article online at: https://www.worldcoal.com/power/27042015/coal-a-major-contributor-to-the-gb-power-mix-2211/


 

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