Clean coal, says the company, is the only short-term solution to pressing environmental, economic and supply challenges.

Iain Miller, chief operating officer for Mitsui Babcock, warned that with the majority of the UK’s coal-fired generation capacity already beyond its original design life and the pending constraints of both the expected closure of most of the UK’s nuclear capacity by 2020 and the impact of the LCPD by 2015, the country is facing a significant capacity crunch within the next decade. Mitsui Babcock warned this ‘energy gap’ may reach 18 – 29 GW by 2015 and result in potential power cuts by 2012.

The company calls for the government to ensure a balanced generation portfolio, including nuclear and renewables, but warns that renewables are intermittent. In addition, nuclear energy is a long-term prospect which would not contribute to the country’s generation capacity for at least a decade, a time frame that would leave generation well short of demand. The European Emissions Trading Scheme (EU ETS) has not succeeded in reducing carbon emissions or changing the energy mix and in order to address this, says the company, the government must invest in clean coal technology, fund demonstration projects and create an environment to encourage investment through the use of the EU ETS and the National Allocation Plan during 2008-2012.

The group also calls for an incentive scheme similar to but cheaper than the Renewables Obligation to encourage investment in clean coal but that is of considerably longer duration than the four to nine years of current environmental incentive schemes. Payback for a modern coal-fired station is some 25 years, Miller adds, and in the absence of a clear regulatory environment this has led to a dearth of investment in new base-load generation over the past decade.

Clean coal, says the company, solves the short-term environmental and supply challenges, is cheaper than both gas and renewables, and there are some 200 years of reserves in the UK. With a development lead time of some 4 years, clean coal also compares favourably with gas-fired generation. Furthermore, the technology offers considerable export opportunities to nations such as China and India which are massively increasing coal consumption and therefore potentially allows significant emissions reductions.

Mitsui Babcock suggests that as a first step the UK should develop clean coal plants on existing sites by retrofitting modern boiler and turbine islands and making them ‘capture ready’ to ease transition to zero emissions units once carbon capture and storage technology and facilities become available. Such a phased introduction, says Mitsui, is the least risk option, but action is required from the government to put clean coal at the top of the agenda in the on-going energy review. Modern clean coal plants, in effect advanced super critical units with thermal efficiencies of 46-47%, would yield a considerable carbon reduction as compared with the UK’s current generation fleet which has efficiencies of the order of 32-38%. A retrofit programme gives the best use of infrastructure, easier planning and permitting processes, more rapid development and the use of ‘four packs’ would provide standardised components.

Mitsui says that 4-6 GW of new capacity are required annually from this year through to 2011, the equivalent of 8 to 12 new units annually. A mix of retrofitting and new build could deliver 10 GW and 8 GW respectively by 2015, effectively plugging the energy gap at a capital cost of some £6 billion ($10.3 billion), compared with wind at £20 billion ($34 billion), says Mitsui, adding that clean coal also has the lowest generation costs of 2p/kWh (¢3.4/kW) for retrofit generation, 2.5p/kWh (¢4.3/kW) for new build and just 3.5p/kWh (¢6/kW) for clean coal together with carbon capture and storage.

Miller said: “Coal has a crucial role to play alongside nuclear, renewables and gas if the UK is to rein in its emissions while also ensuring security of supply. It answers our short-term problems because it can be implemented quickly, but also has a part to play in the long-term because we have 200 years of supply.” Miller adds: “The work needs to start straight away if we are going to have security of supply and not fail to meet our carbon dioxide emissions targets.”

Former energy minister Brian Wilson backed the campaign for increased use of clean coal saying that it is an issue not of if we use coal, but how. Wilson said: “I’ve always supported clean coal as part of a diverse energy mix,” adding that the 2003 white paper, which stipulates the 70% of the UK’s electricity will be generated from gas, 90% of which will be imported, is “no longer credible.”

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