Coal consumption has been declining in the UK for decades
In the United Kingdom, electricity produced from coal declined from 42% of total electricity generation in 2012 to 7% in 2017, according to the U.S. Energy Information Administration.
According to U.K. National Grid data, on April 21, 2017, the country went 24 hours without any electricity generated from coal for the first time since the 1880s. In Jan. 2018, the U.K. government laid out an implementation plan to shut down all coal-fired electricity generation plants by 2025 that do not have carbon capture and storage technology.
At the time, industrial coal use accounted for more than half of total U.K. coal consumption, and railroad and home use accounted for almost a quarter of total coal consumption. The remaining coal consumption in 1956—about 50 MMst—was mainly in the electric sector.
As industrial, railroad, and residential use of coal decreased, consumption of coal by the electric power sector increased, peaking at 99 MMst in 1980. Coal consumption in the electric power sector began a steep decline in 2013. Several factors contributed to the decline, including the implementation of the U.K. Carbon Price Floor (CPF), which increased the cost of carbon emissions for electric generators.
The United Kingdom’s CPF works in combination with the European Union’s Emissions Trading System (EU ETS). If the EU ETS carbon price is lower than the U.K. CPF, electric generators have to buy credits from the U.K. Treasury to make up the difference. The CPF applies to both generators that produce electricity for the grid and companies that produce electricity for their own use.
Although originally intended to increase annually, the CPF was capped from 2016 to 2020 to limit the impact on U.K. businesses. Discussions are ongoing about the value of the CPF after 2020.
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