Uniper confirms closure date for its Ratcliffe coal-fired power station, as consortium of top banks reveal plan to accelerate Asian coal power phase out
This week has seen a further blow to the global coal market in both industrialised and emerging economies, as the UK’s coal power phase out entered its end game and some of the world’s top banks revealed plans to accelerate the closure of coal power plants in Asia.
Energy giant Uniper today confirmed it is to close its Ratcliffe-on-Soar coal power plant in September 2024 once it has fulfilled its current contract to provide capacity under the UK’s Capacity Market scheme. It also announced that one of its generating units at the site would be closing earlier in September 2022.
“We are taking this opportunity to reduce coal generation on the GB system by closing one of the four 500MW units, two years ahead of the government’s announced coal phase out date,” the company said in a statement. “Uniper’s strategy includes our ambitious target to make our power stations in Europe carbon neutral by 2035 and this action is part of our ongoing decarbonisation commitment, whilst still continuing to provide reliable power to support the GB system. The remaining three units at Ratcliffe will continue to provide reliable power to support the GB system until the end of September 2024, in line with our existing Capacity Market agreements with the government.”
The move is the latest in a string of coal power plant closures in the UK over the past decade, as generators have been squeezed by falling renewables costs and rising carbon prices that have left coal power plants at a major financial disadvantage to clean power generators and lower emission gas plants.
Uniper said it would now work closely with employees and unions, local councils, Local Enterprise Partnerships, and universities as it look to advance plans to turn the Ratcliffe site into a “zero-carbon technology and energy hub for the East Midlands”.
“We see the site development creating employment based around modern industrial and manufacturing uses, with sustainable onsite energy generation,” the company said, adding that it has already submitted a detailed application for planning permission for the development of an energy recovery facility on part of the Ratcliffe-on-Soar power station site.
“Over the past 54 years Ratcliffe power station and our colleagues, have made a critical contribution to power generation in the UK,” Mike Lockett, UK country chairman and chief commercial office for power at Uniper. “We’re proud of the contribution that Ratcliffe has, and continues to make in keeping the UK’s lights on. And we’d like to say a big thank you to all those colleagues past and present, who have been part of Ratcliffe’s story. We’re now looking at what comes next for the site and exploring options with our local and regional stakeholders.”
The news came just hours after Reuters and the BBC reported that a coalition of some of the world’s largest financial institutions are working on a plan to pull forward the closure dates for coal power plants across Asia, which remains the main growth market for coal globally.
According to reports the initiative has been developed by UK insurance giant Prudential and the Asian Development Bank (ADB), and has secured backing from a number of major banks, including HSBC and Citi.
The mooted initiative would see top investors acquire coal power plants in Asia and work to close them ahead of the end of their projected lifespan. The ADB is said to be hopeful the plan can be finalised ahead of the COP26 Climate Summit in Glasgow in November, with a pilot programme in development for a leading south east Asian market.
Aspects of the plan are yet to be finalised including what to do with the plants after they are closed and what role carbon credits could play. However, it is hoped that financial institutions could be convinced to take lower than usual returns on their investments in a programme that could play a big role in helping them meet their stated net zero emission goals.
“By purchasing a coal-fired power plant with, say, 50 years of operational life ahead of it and shutting it down within 15 years we can cut up to 35 years of carbon emission,” Ahmed M Saeed, ADB’s Vice President for East Asia, Southeast Asia and the Pacific was quoted as saying by the BBC.
Don Kanak, chairman of Prudential Insurance Growth Markets, who developed the initiative, told the broadcaster that accelerating the retirement of existing coal plants was critical if the world is to meet its climate goals. “This is especially true in Asia where existing coal fleets are big and young and will otherwise operate for decades,” he added.
Read more: businessgreen.com