How the UK quit coal-fired power (and what comes next)

The UK — the birthplace of coal-fired power generation — has quit the dirtiest fossil fuel for good after switching off the Ratcliffe-on-Soar plant for the last time on September 30.

It’s the first Group of Seven (G7) country to achieve this feat, but the 14th of 38 Organisation for Economic Co-operation and Development (OECD) nations to do so, according to energy research group Ember.

A brisk phase-out: As recently as 2012, coal comprised nearly 40% of the UK’s electrical output, though an accelerated renewable energy programme saw its share decline at a rapid pace — with 15 plants either shutting or switching to other fuels since then.

In the first eight months of 2024, the fuel made up slightly less than 1% of power generation, Ember’s data shows. On the other hand, renewables, led by wind, accounted for 52% of the mix, and nuclear 17%.

That means all fossil fuels — mainly gas — made up less than a third (31%) of the total in the year to end-August. That’s the same share that renewables and nuclear combined held in 2012.

August was a particularly clean month for UK power generation, with renewables and nuclear at 78.4% of the generation mix.

Policy nudges: The speedy shift away from coal was prompted by evolving energy economics and several regulatory tweaks.

• Since 2005, power generators haven’t been able to pollute for free, as they did previously. The launch of the EU Emissions Trading System meant the electricity, manufacturing, aviation and maritime sectors had to start paying for their carbon emissions.
• Then, in 2008, the UK passed the bipartisan Climate Change Act, which included a legally binding target to slash emissions by 60% by 2050, compared to 1990 levels (this has since been revised to say “net zero” emissions by mid-century).
• In 2013, emissions performance standards were introduced, requiring any new power plant to not exceed 450g of carbon emissions per kilowatt hour generated — a level that unabated coal plants simply can’t achieve. In the same year, a minimum price on carbon emissions was introduced.

In the years that followed, the UK’s existing coal-fired power plants became increasingly uncompetitive in the face of carbon prices, air-pollution rules, and a precipitous decline in the cost of wind and solar energy.

The government lent support to the emerging renewables sector in the form of contracts for difference auctions and specific targets for offshore wind additions, among other strategies.

The surge in renewable energy deployments drove coal out the mix, and has pushed gas output to the lowest levels since 2012. As a result, the UK’s power sector emissions have fallen by three-quarters since 2012, per Ember data.

Next steps: The UK government wants to eliminate carbon emissions from the power system by 2030, and has pledged to double onshore wind, triple solar power, and quadruple offshore wind to get there.

Modelling by Ember shows that the UK can get gas down to 2% of its electricity mix by 2030. The fuel’s only role by then will be as a critical reserve asset.

However, it won’t be easy. Among other things, the government will need to find ways to speed up the grid connection process, which can delay power projects by years.

“Rapidly reducing gas will require some of the same approaches that were applied with the coal phase-out, such as long-term policy clarity and support for renewable deployment, but there are key differences,” says Frankie Mayo, a senior energy and climate analyst at Ember.

“There is no single low-carbon source that can replace the current functions of gas plants in the power system due to their role in balancing supply and demand at scale, so the next phase of decarbonisation will need more of a whole-systems approach than was in play with the UK’s coal phase-out,” Mayo says.

Big batteries are set to play an increasingly important role. The country’s energy system operator says battery storage capacity will need to increase by more than 14GW between 2025 and 2035.

And grid expansion projects will be critical to facilitate the roll-out of wind and solar.

Fintan Slye, executive director of the system operator — which has been tasked with advising the government on its power sector decarbonisation plan — says achieving a clean power by 2030 “is achievable”.

Aside from speeding up the grid connection process, the operator aims to expand demand flexibility programmes and the role that households play in the energy system, Slye said in a recent speech.

“We’ve achieved great things together already – but for ‘clean power by 2030’, we’re going to have to move and do it quicker.”

Ensuring a ‘just’ transition: As the UK prepares to (mostly) phase out gas and decarbonise other industries, there are lessons in how the Ratcliffe plant was shut, trade unions say.

In 2020, representatives from the facility’s recognised unions began planning and negotiating for a solid transition plan for the 154 workers there. They presented proposals to the plant’s operator, Uniper.

Chris Howe, a workplace representative at Ratcliffe, says giving unions a say in the decommissioning strategy “played a huge role in ensuring that what can be a stressful process and time in people’s lives is transitioned smoothly, achieving a positive outcome whenever possible.”   

Uniper and the unions identified new roles for workers to move into — both at the company and its partners — and funding was provided for retraining. An on-site jobs centre was launched, and voluntary retrenchment packages were offered as well.

“While the closure of the power station brings great sadness to many, the atmosphere within the workforce is also remarkably positive,” says Craig Stewart of the Trades Union Congress. “The well-managed transition, by both Uniper and the recognised unions, has resulted in a feeling of relief.”

Zooming out: The speed at which the UK phased out coal is roughly what’s needed globally in the years ahead if the world is to limit warming to 1.5 degrees Celsius above pre-industrial revolution times, according to an analysis by the World Resources Institute (WRI).

Coal’s contribution to global power output must fall from 35.5% in 2023 to 4% by 2030, the institute says.

This’ll be a tall order considering that countries including China and India are still building new coal plants.

However, a number of the world’s largest economies are racing to axe the dirtiest fossil fuel. Across the 38 OECD (Organisation for Economic Co-operation and Development) nations, coal generation has more than halved since 2007, with the growth in wind and solar responsible for 87% of the fall, per Ember data. Coal’s share of OECD power output slumped to 17% in 2023, from 36% in 2007.

With the UK joining the list, a third of OECD countries are now free of coal-fired electricity.

“The UK spearheaded the coal-powered industrial revolution over 250 years ago and is now demonstrating the viability of a 21st-century clean power transformation,” says Jennifer Layke, global director for energy at the WRI.

Calling time on coal-fired power “sets a strong example for others” and shows that political will, coupled with a comprehensive strategy, can get the world much closer to a zero-carbon future, Layke says.

The UK is still using coal in hard-to-abate heavy industrial processes, but the country “set records last year” in electrification via heat pumps in both the industrial and household sectors, Layke added.

“To continue progress, the government must now turn its sights to policies and timelines that transition British industry away from oil and fossil gas. Acting on recent discussions of increasing windfall taxation and reducing subsidies could accelerate investments in clean alternatives.”