This year, the UK has officially ended the era of coal-fired power generation, a significant milestone in the nation’s journey to reducing its carbon emissions and combating climate change. As the most carbon-intensive fossil fuel, coal has long been in the crosshairs of environmentalists and policymakers alike. Its elimination from the UK's energy mix is a crucial step towards achieving net-zero targets and fulfilling the commitments of the Paris Agreement, adopted in 2015 at COP 21.
In April 2017, the National Grid confirmed that Britain had the first coal-free day since the industrial revolution. This unprecedented shift is largely due to the closure of the majority of the UK’s last remaining coal power stations, marking the end of an era for a fuel that once powered the nation’s industrial revolution. Now, after the closure of Ratcliffe-on Soar, based in Nottinghamshire, the UK is officially coal-free – aiding the future of a fossil free UK.
The Decline of Coal
The decline of coal in the UK has been swift. In 2012, coal still accounted for about 40% of the UK’s electricity generation. However, a combination of economic, environmental, and political factors have driven the sharp reduction in coal use. According to a blog posted in 2020 by our Head of Ethical Research, there were just ‘five coal-fired power plants left operating in the UK (compared to 14 in 2015);’ thanks to a growing reliance on cleaner energy sources such as wind, solar, and natural gas.
In 2020, the last coal shipment was delivered to the Drax power station in North Yorkshire, marking the symbolic end of an era. The Drax plant, once Europe’s largest coal-fired power station, had already converted four of its six generating units to biomass. By 2021, it confirmed the closure of its final coal units.
Other major power stations, such as Fiddler’s Ferry and Aberthaw, followed suit, closing their doors after decades of operation. These closures reflect the reality that coal-fired plants are no longer competitive with modern, cleaner technologies like wind, solar, and gas plants.
What Comes Next?
While the coal era has ended, the UK still faces challenges in its transition to a truly green energy future. Despite the shift away from coal, the country remains reliant on natural gas, which, while cleaner than coal, still produces significant carbon emissions. Environmental groups argue that the focus on gas should be temporary, urging the government and energy companies to accelerate investment in renewable energy.
One concern is that the closure of coal plants has coincided with increased investment in gas-fired power stations. Although these plants are more efficient and emit less carbon than coal, they still contribute to the UK’s overall emissions. Moreover, there are concerns about the UK’s reliance on imported gas, especially as global energy markets face increasing volatility.
On the renewable front, the UK has made impressive strides, particularly in offshore wind. The country is now home to the world’s largest offshore wind farm, the Hornsea Project, which has played a pivotal role in reducing the carbon intensity of the UK’s electricity supply. However, for the UK to reach its goal of net-zero by 2050, it will need to continue ramping up investment in a diverse mix of renewable technologies, including solar, onshore wind, and tidal energy.
Sustainability and Biomass: No Silver Bullet
Another critical element of the UK’s post-coal future is the role of biomass. Power stations such as Drax have converted to burning wood pellets rather than coal, positioning biomass as a key player in the nation’s energy mix. Whilst biomass is renewable, there are questions about its long-term sustainability.
Biomass is often considered a renewable energy source because, in theory, the carbon emitted during combustion is offset by the carbon absorbed by the trees as they grow. However, the sustainability of biomass is far from guaranteed, and it is by no means a silver bullet in the fight against climate change.
Critics argue that burning biomass can still produce significant carbon emissions, especially if the wood pellets are not sourced sustainably. Drax, for example, imports most of its biomass from overseas, raising concerns about the emissions generated during the transportation of these fuels and the deforestation impacts in the regions where the wood is harvested. The loss of biodiversity in forest areas, coupled with the long time it takes for trees to regrow and reabsorb carbon, complicates the idea of biomass being carbon-neutral.
In addition, the process of converting trees into wood pellets is energy-intensive, requiring substantial amounts of energy, which further offsets the environmental benefits. There’s also the risk that, as the demand for biomass increases, forests could be harvested at unsustainable rates, exacerbating rather than alleviating environmental damage. The broader picture of land use, deforestation, and the time needed for carbon reabsorption casts doubt on the ability of biomass to serve as a long-term solution for decarbonising energy.
Whilst biomass may offer a stopgap in reducing coal reliance, it should only be a short-term fix. The real challenge is to ensure that biomass does not hinder the transition to truly clean energy sources like wind, solar, and tidal power. Therefore, although it is playing a role in the UK's move away from coal, biomass alone cannot be seen as the path to net-zero emissions. True sustainability will require continued investment in genuinely low or zero-carbon technologies, alongside stricter regulations on biomass sourcing and its overall role in being an energy provider in the UK.
A Coal-Free UK: What It Means for Investors
As the UK transitions away from coal, the financial implications for investors are significant. Ethical investment strategies increasingly focus on divesting from fossil fuels, with coal being the first to go. For many ESG-conscious investors, coal represents an unsustainable risk, both environmentally and financially. The phase-out of coal in the UK aligns with broader global trends as countries strive to meet their climate commitments.
Ethical Screening offers a range of fossil fuel exclusion options for investors, including criteria for excluding companies involved in coal mining, coal-fired power stations, and other high-carbon activities. These options allow investors to tailor their portfolios to align with their environmental goals, supporting the transition to a low-carbon future.
The UK's transition to a coal-free energy system is a major achievement, but it’s only the beginning. As the country works towards its ambitious net-zero goals, the focus will shift from reducing coal reliance to eliminating all fossil fuel dependencies. With growing investment in renewable energy and a strong commitment to sustainability, the UK is well on its way to a cleaner, greener future. However, the challenges ahead are significant, and the energy sector must continue to innovate and invest in sustainable solutions to meet the demands of a rapidly changing climate.