Scotland’s last coal power station is set to close and by the end of the year just six UK stations will remain. But in a challenging market, can these keep firing until the government’s 2025 deadline for the end of UK coal?

At 3pm on Thursday, the turbines of Scotland’s last coal power station at Longannet will spin for the last time. Coal, the lifeblood of the British economy for more than two centuries and now a terrible burden on the climate, is drawing its final breaths before an inevitable death. The question is: how long can it cling on?

Longannet’s closure is the first in a year that will see a cascade of further shutdowns. Units at Rugeley, Eggborough, Ferrybridge and Fiddlers Ferry will all go cold over the coming summer months, removing 44% (around 8GW) of Britain’s coal-generating capacity in the turn of a season. This follows the closure of 8GW of ageing coal plants since 2012.

European air quality laws have precipitated many of the recent closures, with old, dirty plants unable to afford the remedial measures needed to meet tightened restrictions.

But this initial strangulation has been overlaid by falling gas prices and the growth of renewable energy, both of which have driven the wholesale price of electricity down by 60% since the beginning of 2014. Unlike gas, coal has high material transport costs and is more heavily affected by the UK’s carbon floor price. All of this means burning coal for power is an increasingly tough business to be in.

By the end of this year, just six stations will remain active.

The five on the mainland have received backing from the government’s capacity market until 2021 (Belfast’s Kilroot plant feeds the all-Ireland market). The capacity market guarantees a steady electricity supply by offering support to generators in return for a commitment to provide a certain amount of power to the grid. But in February, that guarantee was shaken when the operator of Fiddlers Ferry power station announced that despite winning government support for three of its four units until 2019, it would be cutting its losses and shutting down. Operator SSE cited dramatic changes in the generation market and opted to pay out the government contract of £33m rather than take on “unsustainable losses” into the future.

The remaining operators are outwardly confident about their short-term future. But their language comes with heavy caveats.

A spokeswoman for RWE’s Aberthaw station - which is currently the subject of a European court battle over breached NOx emissions - said: “We are working to secure that station into the 2020s and are optimistic about its survival, but in a changing market you can only do what you can do.”

The coal industry faces “extremely challenging times” said a spokeswoman for EDF. But she said seven out of eight of the company’s units at Cottam and West Burton have won capacity market contracts until 2021, indicating the company’s intention to keep them open until at least that time.



At the Kilroot station, operator AES has made big investments in emissions scrubbing devices in order to continue until at least 2020. AES communications manager Claire Addison said the plant was exploring options to go until 2023, but “changing commodity prices have made this more challenging”.

Britain’s largest power station, Drax, has been slowly converting its units to biomass, although it offers no timeframe for a complete switch.

The industry’s own trade association paints an even less optimistic picture. Kyle Martin, a senior policy manager with Energy UK, said the decision taken by the Fiddlers Ferry plant raised serious concerns about the viability of the remaining coal plants.

“If things stay the same or get worse, I don’t think they’ll be making money going forward,” he said. “There’s only so many years you can run a plant making a loss before the decision has to come.”

The Department for Energy and Climate Change’s (Decc)’s projections for the price of electricity will therefore make grim reading for those working in the coal sector. No lift is expected before the end of the decade.

The very same low electricity price that is pushing coal to the edge has also frightened off much of the investment in new gas plants the government had wanted to encourage through the capacity market. Meanwhile, plans to expand the nuclear sector look ever more quixotic.

This raises the prospect of a coal collapse at a time when there is little to replace it, said Jim Watson, director of the UK Energy Research Centre.

“Of course we want them to close,” said Watson. “I’m very supportive of that. But having them close at a time when you’ve got the other capacity coming online is the challenge. It’s managing that transition.”

This is why Decc has moved to broaden the capacity market and introduce a proposed new round of funding for 2017/18. The move, said Watson, was clearly aimed at driving gas investment. But if that doesn’t materialise it will further subsidise the continuation of coal.

“The implication is that consumers will pay more for this than they would have done otherwise. But that may be needed,” Watson told the Guardian. “Clearly the government are not going to preside over the lights going out. I would say that a lot of the press coverage is often a little bit overblown about this. We have got in place the instruments to manage this.”

All of this is occurring against a the backdrop of an apparently arbitrary date of 2025, chosen by the energy and climate change secretary Amber Rudd for the end of coal generation in the UK. But no detail has been released regarding the structure of this phase out.

This has left companies unsure about how to proceed with the investments they need to stay viable, said Martin. “Certainty is always useful. Trying to bid in for anything with questions being left by government isn’t useful.”

In the absence of a concrete policy, the decision will remain an economic one. If market conditions improve, then experts have raised the prospect that coal, the most carbon-intensive form of electricity, could possibly hold out until 2030. But the end of coal seems likely to come sooner rather than later.