E.ON: a new role for old king coal:
EON UK has unveiled plans to invest in new UK coal-fired power stations. Although the improved efficiency this will bring will benefit E.ON, with the emission ramifications of building new coal stations in the UK, it is interesting to consider how the UK government can reconcile the market-led drive back towards coal versus its pledge to achieve significant carbon emissions reductions. E.ON UK has submitted plans to build two new 800MW supercritical units at its Kingsnorth coal-fired power station in Kent. The last such investment in coal-fired stations in the UK was the second phase of Drax, commissioned over 20 years ago. The new plant is to be the UK's first supercritical coal-fired station which will operate at an efficiency of 45%, compared to the existing efficiency of the older units at 36%. While the improved efficiency will benefit E.ON UK, it is not obvious how such investment in coal will ultimately help it reach its commitment to reduce its carbon intensity by 10% by 2012. However, the more glaring dilemma for the UK government is the impact of increased coal-based generation on UK carbon dioxide emissions figures. The UK Kyoto commitment is to reduce levels of carbon dioxide and five other greenhouse gases by 12.5% below 1990 levels by 2012. A market-led re-orientation back towards coal will only hinder its ability to achieve such reductions. The latest figures for 2005 indicate that the UK is only 4.8% under 1990 levels. There currently seems to be a very slim chance then that market-led solutions will deliver the Kyoto reduction targets without further intervention by the government. If it is all about the targets, then the UK government needs to keep its fingers crossed that a number of carbon reducing policies are accepted and implemented with enthusiasm by the market; primarily the adoption of new nuclear build, the development of more gas-fired stations, the development and acceptance of carbon capture technologies and ramped up investment in renewable energy. Only if all of these policies are adopted with some gusto does the UK stand a chance in meetings its Kyoto commitments. 23.10.06