The United Kingdom is taking steps to reform its flagship electricity security program in order to meet its ambitious goal of transitioning to a "carbon-free power grid" by 2035.
The proposed changes, which will be open for consultation by the Department for Business, Energy and Industrial Strategy, include the implementation of emissions limits for fossil fuel plants starting in 2034 and the offering of multiyear contracts to large consumers in an effort to reduce demand.
The country's power supply is currently managed through auctions held four years in advance, which ensure sufficient capacity to meet peak demand and prevent blackouts. However, these auctions often result in the subsidization of fossil fuels until 2040, a loophole the government hopes to close by implementing an emissions intensity limit from 2034.
This limit is intended to incentivize the use of hydrogen, carbon capture technology, or reduced running hours at fossil fuel plants. The government is also considering the possibility of creating managed exits for fossil fuel plants by allowing operators to begin new agreements if they decarbonize, or by implementing alternative support mechanisms.
The need for reform in the electricity security program is pressing, as the UK has set a goal of installing 50 gigawatts of offshore wind power by the end of the decade. In order to keep the lights on during periods of low wind, it is necessary to have a sufficient amount of backup capacity.
Additionally, as the country moves towards electrification in transportation and heating, demand for electricity is expected to double, making secure alternative supplies on low-wind days even more important. These alternative supplies may come in the form of fossil fuel plants, batteries, or demand reduction.
The government contracts being proposed are intended to make it financially viable for these sources of backup capacity to be maintained, even if they are not needed on a constant basis. The Department for Business, Energy and Industrial Strategy will now consult on the proposed reforms before releasing its final plan.