The U.K. could experience a sharp increase in the building of gas-fired power stations
The "dash for gas" forecast in its Future Energy Scenarios report estimates that up to 7 gigawatts (GW) of new gas-fired plant will be constructed by 2022. The strong case for gas is supported by the U.K. government's commitment last year to close all coal-fired power plants within a decade. It has called for all unabated coal-fired plants to close by 2025 and be restricted in their usage from 2023.
"As a result of environmental pressure and legislation there is no unabated coal-fired generation after 2025 in any scenario," National Grid stated. "Over the next 10 years there will be an increase in the number of closures of traditional large-scale power stations, due to a combination of environmental and economic factors. To meet forecast demand in all scenarios requires significant new build programmes. By 2040 in the No Progression scenario, unabated gas capacity exceeds 38 GW and output is more than 112 gigawatt hours (GWh), or 32% of all electricity output."
The No Progression scenario, which is the highest case for new-build gas, requires approximately 7 GW of new large-scale combined cycle gas turbine (CCGT) plants by 2022 to maintain security of supply to compensate for coal plant closures. National Grid said that the required levels of new CCGTs will mean the network should be prepared for a potential "dash for gas".
"Delivery of 7 GW of new build gas capacity will require an increased level of certainty for investors to make Final Investment Decisions (FID)," the report added. "This certainty can be delivered by clear articulation and a reduction in ambiguity around the Capacity Market."
However, the government will have to do more to encourage investors to back the planned expansion of gas-fired power. Last week, the planned Trafford gas-fired power station near Manchester--the only gas-fired project in the U.K. to win financing under the Capacity Market scheme--failed to secure funding again. The $1.3 billion project has suffered a number of setbacks in the past year. Carlton Power (Stokesley, England) has been thrown a lifeline by the government and now has until December 19 to secure the investment. When commissioned in 2019, the 1.9 GW plant will be able to power more than 2 million homes.
For more information, please subscribe to the Industrial Info blog for more updates.