Q4 2016: 2016 – The year in review

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by Dr Iain Staffell – Imperial College London 

2016 was a dramatic year for Britain, not least for its electricity system. 

Generation from coal fell 61% from the previous year. Gas was up by 51% and low-carbon generation reached its highest ever share. This was the largest annual swing in fuel shares since the miners’ strike of 1984, and the largest ever in percentage terms.

Coal’s share of output fell to just 9%, with 28 TWh produced – the lowest amount since the start of World War II. This placed coal behind wind for the first time ever, which provided 10% (31 TWh) of electricity: a symbolic shift in the transition to low carbon sources.

Over the last five years 75 TWh of generation from coal has disappeared. Replacing it are 25 TWh from wind and solar, 15 TWh from biomass and 15 TWh that were imported. The remaining 20 TWh did not need to be generated due to efficiency improvements. While gas generation has shot up in the last year, it now stands at the same level as five years ago.

That fact that it is gas which rebounded and not coal was largely due to the UK’s Carbon Price Floor (CPF) increasing the total cost of coal relative to gas. This has relegated coal to a more ‘climate-friendly’ role of providing infrequent peaking power at times of greatest need, allowing lower-carbon gas to take over as the baseload generator.

Over the last two years, the CPF has added around 0.5 pence per kWh to the cost of generation.1 In return it has played a major part in reducing carbon emissions from Britain’s electricity to their lowest for 60 years. The charts below compare the generation mix in 2016 and 2012 – showing the scale of the change over the last four years.

Daily generation mix during 2016:

Daily generation mix during 2012:

Authors: Dr Iain StaffellProfessor Grant Wilson

  1. Based on the four quarters to 2016 Q3 (where latest prices are available), taking the most expensive fuel (coal or gas) with carbon charged at £18 per tonne versus the most expensive with £4.90 per tonne as under the EU ETS. 

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