From coal mines to CfD auctions: 7 green policy stories you may have missed this week

With Boris Johnson’s resignation dominating the headlines, several policy stories on energy and the environment have flown somewhat under the radar this week. Here, we highlight seven of them, including an update on the Cumbria coal mine proposals and the latest renewable energy auction.

From coal mines to CfD auctions: 7 green policy stories you may have missed this week

This week was the UK’s Net-Zero Week – a campaign designed to raise awareness of the meaning of the term and the benefits of the transition across civil society, backed by the Government. But it remains to be seen how successful this campaign could possibly have been while overshadowed by a string of more than 50 resignations from Government positions, culminating in Boris Johnson confirming his resignation as Prime Minister and Conservative Party leader.

Here, edie recaps on seven green policy stories from the UK and EU that readers may have missed while ‘resign-scrolling’.

Government’s decision on Cumbria coal mine delayed

The Government was due to make a planning decision this month on West Cumbria Mining’s proposals for a new deep coal mine in Whitehaven. Cumbria County Council approved the plans in October 2020 and, for several months, the Government resisted calls to intervene with that decision. But, ultimately, a public inquiry was ordered in March 2021 with the mine’s compatibility with national and international climate targets being the key sticking point.

The inquiry officially closed late last year and the Government had originally promised to make a final planning decision on or before 7 July. This is a task that would have sat with Michael Gove. It was reported on that day that the decision has been deferred due to the situation in Whitehall, with no new date confirmed yet.

The project has proven controversial within the Conservative Party. Boris Johnson criticized the plans on the eve of COP26 after months of refusing to reveal his stance. But at least 40 Conservative MPs voiced support, publicly, for the project.

Proponents of the project highlight that the coal produced would not be used for power generation in the UK or abroad. The UK is bringing all coal generation offline by October 2024. Instead, the coal will be used by the steel industry. Proponents argue that it would be better to serve British steelmakers with local coal than to import coal, as imported coal also comes with the emissions associated with international shipping. They also point to the job creation potential of the mine.

Opponents have pointed out that even if the coal is used for steel, other nations – looking to the UK as COP26 president – will deem it acceptable to expand coal power and to keep using coal in manufacturing steel and other goods for a longer time.

There are also questions about whether British steelmakers will really want the coal, as they lean in to cleantech investments. The UK Government was told by the Climate Change Committee that coal should not be used for British steelmaking beyond 2035. Yet West Cumbria Mining applied to dig, potentially, through to 2049. Operations are actually likely to be far shorter – but that, in itself, raises questions around the just transition and levelling up.

Drax agrees to extend coal generation

Last month, EDF agreed to keep coal operations at its West Burton A power plant online this winter, with the six-month extension touted by the UK Government as a means to help ensure energy security.

Kwasi Kwarteng announced this week that a similar agreement has been struck between the Government, Drax and National Grid, to extend coal generation at Drax’s power plant in Selby, Yorkshire. Two coal units were due to close at the site in September 2022 but will now be available until the end of March 2023.

Kwarteng tweeted on Wednesday (6 July): “With Russia cutting off gas to parts of Europe, this is a sensible precaution back home. As Energy Secretary, I have a responsibility to ensure we have enough supply this winter.”

The Government has maintained that it will not postpone its legal requirement for coal generation to end permanently, which was moved forward from October 2025 to October 2024 last summer.

Talks are ongoing, Kwarteng has stated, with Uniper. Uniper operates the UK’s third and final remaining coal power plant, a four-unit facility in Nottinghamshire. The firm is due to end generation at one of its four units this September. The remaining three are then set to come offline in September 2024.

Energy Security Bill has first reading

In any other week, the introduction of the Energy Security Bill to Parliament would have received more attention. The Bill was introduced on Wednesday (6 July) and is designed to deliver on many of the key measures detailed in the Energy Security Strategy, and other recent green policy packages such as the Hydrogen Strategy. These include the creation of new business models for low-carbon hydrogen and carbon capture and storage, designed to reduce investment risk; the appointment of Ofgem as heat networks regulator; the trial of a ‘Hydrogen Village’ by 2025 and more. Read edie’s full story here.

On the carbon capture business model, BEIS has also this week allocated a £54m funding round for 15 projects developing and scaling greenhouse gas removal technologies, including direct air capture and waste-to-hydrogen. This move follows the recent launch of the UK’s first licencing round for the storage of captured carbon. MPs on the Environmental Audit Committee (EAC) are cautioning against too bullish an approach to emissions removal technologies, on the grounds that they may disincentivise emissions reductions and that many are in their relative infancy at the commercial scale.

Roaring success for latest CfD auction round

Another story which would have been top of mind for a fair amount of time in quieter weeks: The results of the latest round of the Contracts for Difference (CfD) auction scheme for renewable energy developers were unveiled on Thursday morning.

In total, 93 projects with existing planning permission across the UK have now secured contracts, totalling 11GW in capacity. According to the Government, this is greater than the capacity of all three previous CfD rounds combined.

7GW of allocations were made for offshore wind. Both onshore wind and solar energy were included in CfD auctions for the first time since 2015.

As well as the sheer size of the auction round, experts remarked on the low prices. The prices for contracts of offshore wind were 70% lower than those secured in the first CfD allocation back in 2015. Within that same timeframe, prices for onshore wind fell by 45%.

Fracking evidence update yet to come

Coinciding with the Energy Security Strategy’s publication in April, Kwarteng wrote to the British Geological Survey (BGS) to request a review of the tremor risks associated with fracking. The Government stated that, if new scientific evidence could prove that fracking could be resumed in the UK with lower tremor risks, it would consider lifting a moratorium that has been in place since 2019. Environmental groups including the Climate Change Committee (CCC) have maintained that, even if fracking could tackle its tremor problem, restarting UK operations would be unwise on climate and ecological grounds.

Kwarteng asked for the review from the BGS before the end of June. With no update coming from Kwarteng’s office, edie reached out to BEIS and to the BGS for an update.

A BGS spokesperson said “There has been a short delay due to the length of the peer review process, which is required to thoroughly assess the report. This is a standard practice for all scientific reports. Once the peer-review process is complete, the report will be submitted to BEIS. We expect this to be in early July.

“The outcome of the report and any further communication about its publication will be handled by BEIS.”

OEP criticizes Defra’s approach to target-setting

Wednesday (5 July) saw the UK’s post-Brexit environment watchdog, the Office for Environmental Protection (OEP), publishing its response to Defra’s proposed legally binding Environment Bill targets on biodiversity, water consumption, pollution, waste and air quality. The targets were first proposed in March but were swiftly criticized for a lack of clarity and ambition by key NGOs.

The OEP’s response adds to many of the main concerns voiced by green groups. It states that Defra’s current plans “provide little clarity” on how these proposed targets will work alongside existing environmental commitments, or how progress will be measured.

EU votes to include nuclear and gas in green finance taxonomy

The first version of the EU’s green finance taxonomy was unveiled in February and, since then, debate has raged about whether gas extraction, gas-fired power generation or nuclear generation should be regarded as ‘transition’ “activities that are needed to achieve climate neutrality”. This refers to the delivery of the EU’s 2050 climate targets.

A motion to veto the EU’s proposal that nuclear and gas should be included in the taxonomy was defeated in a vote on Wednesday. Proponents of the inclusion of gas and nuclear have pointed out that they should only receive financial backing with additional transparency obligations and requirements on emissions, energy transition, health and safety, under the taxonomy. Opponents pointed not only to the climate implications of increased gas finance in particular, but the falling cost of renewables and skyrocketing price of gas.

The UK is likely to mirror the EU’s approach when it launches its own taxonomy. This is expected later this year as part of an updated Green Finance Strategy. Ministers have been cautioned about including nuclear and gas in its own post-Brexit framework by organisations including the UK Sustainable Investment and Finance Association (UKSIF), which represents more than 270 organisations with more than £10trn of assets under management.

For those wishing to recap Johnson’s resignation and its potential implications for green policymaking in the UK, here are edie’s long-form articles on the topic:

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