Achieving 60 % CO2 reductions within the UK energy system - Implications for the electricity generation sector

This paper explores how investment in the UK electricity generation sector can contribute to the UK goal of reducing CO2 emissions with 60% by the year 2050 relative to the 1990 emissions. Considering likely development of the transportation sector and industry over the period, i.e. a continued demand growth and dependency on fossil fuels and electricity, the analysis shows that this implies CO2 emission reductions of up to 90% by 2050 for the electricity sector. Emphasis is put on limitations imposed by the present system, described by a detailed database of existing power plants, together with meeting targets on renewable electricity generation (RES) including assumptions on gas acting as backup technology for intermittent RES. In particular, it is investigated to what extent new fossil fuelled and nuclear power is required to meet the year 2050 demand as specified by the Royal Commission on Environmental Pollution (RCEP). In addition, the number of sites required for centralized electricity generation (large power plants) is compared with the present number of sites. A simulation model was developed for the analysis. The model applies the UK national targets on RES, taken from Renewable Obligation (RO) for 2010 and 2020 and potentials given by RCEP for 2050, and assumed technical lifetimes of the power plants of the existing system and thus, links this system with targets for the years 2010, 2020 and 2050. The results illustrate the problem with lock-in effects due to long capital stock turnover times, which can either lead to political difficulty meeting targets in established policy or costly early retirement of power plants (stranded assets) to comply with emission goals prescribed in Kyoto targets or the 60% emission reduction goal. Assuming typical technical lifetimes of the power plants it can be concluded that the present electricity generation system continues to play a significant role for several decades generating about 50% of projected electricity demand in 2025. In addition, the results show that although the high degree of fuel switch from coal to natural gas which has taken place in the UK over the last decade (which seems to continue) which enables the UK to fulfill the Kyoto target, the resulting dependency on gas gives a more or less constant level of CO2 emissions between 2010 and 2020. Hence, meeting stricter abatement targets in a second Kyoto period requires emission reductions in other sectors or penetration levels of RES faster than prescribed in the RO.