The deferral of Eon’s plans for a new coal- fired power plant at Kingsnorth can be read in several ways. The permits that developers get for new plants are effectively 5-year options in any case, and the history of such projects is littered with tactical delays of all kinds. It could easily be a low-risk shot across the present government’s bows; or simply waiting to see what a Tory regime will do.
Whatever, it’s hard to see it as anything other than a blow for little Ed Miliband’s Carbon Capture & Storage scheme. This, you may recall, floats the idea of compulsory retro-fitting of costly CCS facilities to any new coal plant (at the owners’ expense, since you ask) if in 2020 a government panel decides it is ‘economic’ to do so. Obviously, the chances are – since it’s not their money - that the panel will decide exactly that.
The putative CCS industry (it doesn’t exist yet but it has a lobbying group anyway) thinks this is wonderful, of course, but sober entities like the Energy Institute have warned Ed that this will put the kybosh on new coal. Eon's decision only reinforces that view.
Meanwhile, in another part of the real world, the recession has meant a huge surplus of CO2 emissions credits is building up, so that the ‘price of carbon’ under the EU’s emissions trading scheme is – and will remain, for the foreseeable future – much lower than is ‘needed’ to stimulate the next wave on investment in renewables. So they’ll need even bigger subsidies …which all count as government expenditure …
Finally, of course, the wholesale price of gas has collapsed, as predicted. All of Ofgem’s recently-published 4 scenarios show gas imports rising strongly in the coming years. If we don’t like the security-of-supply aspects of this, we’d better get used to it. Dash-for-gas(3), here we come.