What is “decarbonisation” of the power sector? Why do we need to decarbonise the power sector in the UK?

Decarbonising the power sector means reducing its carbon intensity: that is, reducing the emissions per unit of electricity generated (often given in grams of carbon dioxide per kilowatt-hour).

Around the world countries need to decarbonise their power sectors as a crucial part of meeting the emissions reduction targets contained in their nationally determined contributions to the Paris Agreement on climate change. The Intergovernmental Panel on Climate Change (IPCC) has stated that “virtually full” decarbonisation of the power sector by around 2050 is necessary to meet the Paris Agreement’s target of capping global temperature rise at 1.5°C, and also to meet the less ambitious 2°C target.

Rapid decarbonisation of the power sector is needed particularly as heat and transport sectors are electrified, creating an increase in demand for electric power. Decarbonisation is being achieved by increasing the share of low-carbon energy sources, particularly renewables, and a corresponding reduction in the use of fossil fuels. Worldwide, renewables now produce a third of power capacity. Capping greenhouse gas emissions from fossil fuel power stations by installing carbon capture and storage (CCS) technology is also expected to play an increasing role. There are now 19 large-scale CCS facilities in operation globally, with four more under construction. When combined with bioenergy technologies for power generation (so-called BECCS – bioenergy with carbon capture and storage), CCS also has the potential to generate ‘negative emissions’, removing CO2 from the atmosphere.

In the short term a shift from ‘dirtier’ coal to lower-emission natural gas can help to reduce power plant emissions: burning coal emits on average 900g CO2/kWh compared with 400g CO2/kWh from gas. However, as far as possible fossil fuel combustion needs to be replaced, primarily with renewables such as wind and solar power. Where fossil fuel power stations continue to operate, CCS will be required.

What is the status of power sector decarbonisation in the UK?

In the UK, decarbonisation of the power sector is necessary to achieve the mandatory greenhouse gas emission targets set in the UK Climate Change Act (2008). The central target was amended in June 2019, for emissions to reach ‘net zero’ by 2050 (that is, any residual emissions will need to balanced with removal or offsetting measures so that emissions are zero overall).

Significant progress has already been made: since 1990, emissions reductions in the power sector have accounted for around half of the UK’s overall emissions reduction. The sector’s emissions halved from 2012 to 2017, firstly due to a substantial reduction in coal-fired generation and a corresponding increase in the share of renewables in the energy mix, and secondly because the improved energy efficiency of products has reduced demand for power. These changes have taken place with the support of a successful combination of European and domestic regulation and legislation – such as the EU’s large combustion plants directive, carbon taxation and subsidies for renewables.

The phase-out of coal-fired power has seen the share of electricity from coal in the UK decline from 40 per cent in 2012 to 7 per cent in 2017. In the third quarter of 2019 less than 1 per cent of generation came from coal and oil combined. The Government has said that by 2025 it will phase out ‘unabated coal’ – coal burnt in power plants not fitted with CCS. At present CCS is yet to get started in the UK although Drax power station in North Yorkshire is currently piloting BECCS technology. Carbon pricing has been instrumental in the fall in coal use. The Government introduced the Carbon Price Support to supplement the European carbon price paid through the EU emissions trading system. UK power generators must pay both the Carbon Price Support and the EU ETS price. At the moment this amounts to about £38 (£18 from the CPS and £20 from the EU ETS). Analysis by the Grantham Research Institute has shown that a carbon price starting at £40 per tonne of CO2 in 2020 rising to £120 per tonne in 2050 (the anticipated cost of carbon capture and storage) should be sufficient to secure a net-zero power sector.

The UK’s independent Committee on Climate Change (CCC) has shown that the power sector could achieve emissions of 3 million tonnes of CO2 equivalent in 2050. These are the ‘residual’ emissions from CCS facilities operating as part of a decarbonised electricity supply sector. (For comparison, in 2018 the sector’s emissions were 98.3 million tonnes [provisional government figures].) The CCC has called for a quadrupling of low-carbon power generation by 2050 as a crucial part of decarbonising the sector.