Business electricity: UK mulls end to coal power by 2023

The UK may close all of its 12 coal-fired power plants by 2023, changing the nature of the business electricity generation. How could this affect SME bills?

As attitudes towards high carbon emissions generation through coal harden, the UK is considering ending all of its coal-fired power generation. This would merely be an acceleration of a movement away from coal – Cockenzie Power Station was the latest to be demolished, Scottish Power’s Longannet plant, SSE’s Ferrybridge, and Eggborough Power’s stations are all due to close next year, while the mighty Drax has been shifting towards biomass generation. Coal now makes up less than a third of business electricity supply.

As Europe’s second-biggest polluter, the UK may make an announcement before 30 November, when UN climate talks start in Paris, according to an unnamed official quoted in media sources but originally revealed by the The Times newspaper. Plants fitted with equipment to capture and store carbon emissions will apparently be exempt from closure.

If the plan goes ahead, generators such as Drax Group, EON and RWE must decide whether to convert their plants to biomass or fit expensive carbon-capture equipment.

According to the National Grid’s most recent FES report, a UK preference for green energy policies would see coal generation steadily fall to zero by 2030. Few coal power stations would be fitted with carbon capture.

Cheapest electricity for business

While renewable energy has been producing more of the UK’s business electricity, green energy is still more expensive than traditional sources, especially as subsidies are being pared back.

Other forms of fossil fuel generation will also be required to ensure adequate supplies of commercial electricity; the National Grid has reported that the winter electricity surplus is modest at best.

Gas is increasingly seen as the ‘bridge’ to a low carbon future, particularly as developments such as fracking have made for the cheapest business gas prices for quite some time. But commercial gas prices are notoriously unpredictable, reacting to everything from Russian military action to sanctions on Iran.

The proposed end to coal power would have positive environmental effects but could put upward pressure on business electricity tariffs. Those SMEs wanting to get a good deal on business electricity prices may want to compare business electricity suppliers sooner rather than later.

Even those locked into a long contract could find that paying the exit fees still leaves them significant savings. And doing this comparison doesn’t have to be onerous: just 20 minutes is enough for us to quickly compare business electricity suppliers and switch you to a new deal (with us taking care of the paperwork). Give us a call on 0330 0100 251 (or request a call back using our form).

Our dedicated page has lots more information about business electricity

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