Select Committee on Environmental Audit Written Evidence

Memorandum submitted by Mitsui Babcock

  Mitsui Babcock is a British company (HQ in Crawley; R&D, Manufacture and Services in Renfrew) established in 1891, and wholly owned by Mitsui Engineering and Shipbuilding Co. Japan, since 1995. We employ 4,000 people worldwide (3,800 in the UK, of whom 1,000 are in Scotland). We serve all sectors of the Energy industry in UK and Europe. In the UK, whilst we have interests in nuclear, renewables, oil and gas, our largest business area is coal-fired power plant. In Asia Pacific and the Americas our main focus is coal-fired power plant.

  In China, we have supplied 4 GW of coal-fired plant in the last decade and in 2003, when approaching 100 GW of pulverised coal fired power plant was ordered, we had around 15% of the boilers for this market, more than 10 GW being high efficiency supercritical boilers. Currently we are bidding coal-fired supercritical boiler plant in Germany, USA and China.

  As a UK company, we support the government's objectives in energy, the environment and enterprise. We have successfully developed cleaner coal technology products with the assistance of the DTI's Cleaner Coal R&D programme and exported these. We have a portfolio of Carbon Abatement Technologies for fossil fired plant at various stages of development ready for full-scale demonstration and are pressing the government to recognise the major opportunities which such technologies bring for carbon dioxide abatement world-wide.

  Our response focuses on measures to obtain significant cost effective reductions in CO2 emissions from fossil power generation additional to those obtained by energy efficiency and renewable measures.


  We welcome yet another "Energy inquiry" since it gives us the opportunity to raise issues that are very important with respect to implementing the objectives of the Energy White Paper—urgent issues which go beyond energy efficiency improvements and deployment of renewables and address directly how to contribute to security of supplies, "Keeping the Lights On" and reducing carbon emissions by addressing technologies for coal-fired plants.

  Our response is limited to comments pertaining to the generation mix, the generation gap that is developing and the relative costs of generation technologies.

  We understand that the Nuclear Industry Association (of which we are members) will respond to the detailed questions on Nuclear power, and we support the Institute of Mechanical Engineers' response, which has a similar focus.


  A balanced portfolio of electricity generation types is necessary to safeguard security of supplies, costs of electricity (against fuel price hikes) and to allow varying generation to match the varying load demand.

  For example:

    (i)  It would be wrong to focus too much generation capacity on nuclear because nuclear is a baseload technology and needs to be backed up by technologies that can match load demand. It is, however, essentially CO2 free and relatively price stable.

    (ii)  It is clear from Danish and German experience that too large a proportion of intermittent renewables generation (wind) causes grid stability issues. Also, the renewable capacity needs to be fully backed up by alternative capacity for times when there is no wind.

    (iii)  Coal and gas provide baseload and load-following capacity. Modern plant are more efficient and produce much less CO2 than the older plant currently in service. Both coal and gas could in future be retrofitted with carbon dioxide capture and the carbon dioxide stored permanently underground.

    (iv)  The advantages of coal over gas are its relative abundance (>200 years supplies), its sources (UK and stable countries around the world) and its ability to be cheaply stockpiled.

    (v)  Whilst generation from old coal-fired power stations produces more carbon dioxide than gas-fired CCGTs, modern clean coal technologies, which can also incorporate biomass cofiring, are closer to CCGT performance[205]. There is also evidence that total lifecycle GHG emissions from gas can exceed those from coal. This is due to methane leakage from pipelines, CO2 stripped out when gas is produced, and CO2 produced during liquefaction and regasification of LNG.

    Advanced Supercritical plant will emit 23% less carbon dioxide than current old coal-fired plant. Fitted with biomass cofiring, the total carbon dioxide reduction can be 40%. Such plant can be designed to be capture-ready (ie capable of having carbon dioxide capture equipment retrofitted later).

    With carbon dioxide capture and storage, around 90% of the carbon dioxide would be captured. See Figure 1.

Figure 1

Carbon Dioxide abatement for coal and gas

  Experience shows that the current generation capacity mix (nuclear 16%, coal 38%, gas 33%), with a growing proportion of intermittent renewables, provides an appropriately balanced portfolio. The challenge is how to replace a large amount of generating capacity which will be retired by 2015 whilst preserving this balance and further reducing carbon emissions.

  The DTI's modelling (A Strategy for Developing Carbon Abatement Strategy for Fossil Fuel Use) shows this can be achieved by introducing carbon abatement technologies for coal-fired and gas-fired plant, including carbon dioxide capture and storage. The amount of coal and gas (+ CCS) that is ultimately needed depends on whether nuclear is closed down, replaced or expanded.


  The generation gap will arise due to the closure of nuclear stations and the closure of those coal-fired stations which "opt-out" of the LCPD. This will reduce the available generation capacity at times of peak demand. In Figure 2, the available generation in 2015 is compared with the required generation capacity.

Nuclear Closures

  The nuclear plants that are scheduled to close by 2015 are listed in Table 1.

Table 1


Dungeness A 1 & 2 450 MW
Sizewell A 1 & 2420 MW
Oldbury 1 & 2437 MW
Dungeness B 1 & 21100 MW
Wylfa 1 & 2980 MW
Hinkley Point B 1 & 21220 MW
Hunterston B 1 & 21190 MW
Hartlepool 1 & 21210 MW
Heysham 1 & 21150 MW
Total8157 MW

  These closures will reduce the nuclear generation capacity from 11.9 GW in 2004-05 to 3.8 GW in 2015.

Note:   If life extensions proposed by British Energy are approved, the closures will be 3400 MW by 2015 and 5760 MW by 2019.


  Currently, out of 27,915 MW of coal-fired plant in England, Wales and Scotland, 15,156 MW have fitted or have announced they are fitting FGD—consistent with Opting In to the LCPD in 2004-05. 13,279 MW of plants are not fitting FGD and would appear to be Opting Out of the LCPD. See Table 2. These plants will only be allowed to operate a total of 20,000 hours between 2008 and 2015 and must close by 2015, removing 13,279 MW of capacity, leaving 14.6 GW in 2015-16.

Opted in ie FGD installed or planned MWe
Drax Power Station3870
Cottam Power Station2008
West Burton Power Station1972
Aberthaw Power Station1455
Ratcliffe on Soar Power Station2000
Uskmouth Power Plant393
Ferrybridge "C" Power Station 978
Fiddlers Ferry Power Station981
Eggborough Power Station980
Opted Out ie no plan for FGD announced MWe
Ironbridge Power Station970
Kingsnorth Power Station1940
Rugeley Power Station1006
Didcot A Power Station1940
Cockenzie Power Station1152
Tilbury Power Station1029
Longannet Power Station2304
Ferryfridge "C" Power Station 978
Fiddlers Ferry Power Station981
Eggborough Power Station980

Plant assumed to be ½ opted in and ½ opted out

Table 2: Coal-fired Power Plants (England, Wales and Scotland)


  This gives total closures of 16.7 GW to 21 GW by 2015.

  These closures are very significant—amounting to 18% to 25% of the installed electricity generation capacity in the UK, which was 75 GW in 2004-05.


  The Average Cold Spell (ACS) peak demand in 2004-05 was 61.5 GW and a plant margin of 21% (13 GW) was necessary to cover the risk of generating plant unavailability (eg breakdown) or higher than average peak demand (eg due to severe weather).

NGC 2005 Seven Year Statement states 61.5 GW

  In 2015-16 the ACS peak demand can be forecast as:
BasisAnnual Growth % ACS Peak DemandIncludingPlant Margin (21%)
No growth062 GW 75 GW
DTI growth forecast0.7% 66.7 GW81 GW
NGC base case0.9%68 GW 82 GW
NGC high case2.4%71 GW 86 GW

  Hence the required generation capacity in 2015 to maintain the current plant margin will be between 75 GW and 86 GW.

  It follows that up to 21 GW of replacement plant and up to 11 GW of additional generation plant will be needed over the next 10 years.


  It is being said elsewhere that it would take 10 years to build a new nuclear power plant (five years planning and licensing, and five years to build). Hence it is already too late for any of the expected generation gap in 2015 to be replaced by nuclear.


  Clean Coal (with carbon abatement) and Gas (CCGT and/or CHP) are the only technologies available to meet this capacity gap in the required timescale. The plants closing are made up of a mixture of "baseload" plants (the nuclear plants) and "load following plants" (the coal and gas plants) which are used to balance electricity supply with demand (winter/summer, day/night). The replacement and additional plants must exhibit greater flexibility since they will co-exist alongside an increasing proportion of intermittent renewable generation. Between 21 GW and 32 GW of new coal or gas plant will need to be built over the next 10 years.

  It takes about three years to build a new gas-fired power plant and about four years to build a new coal one.

  Hence, to maintain security-of-supplies at times of peak demand, and to "keep the lights on" in 2016, we will need to see between 3,600 and 5,000 MW of plant completions each year from 2009 to 2015, which means between 3,600 and 5,000 MW of projects being started each year between 2005 to 2011.


  Wind generation is excluded from the consideration of "how to fill the generation gap" because, whilst the ambitious targets to instal onshore and offshore wind may contribute significantly to the overall annual generation (in TWh), wind cannot be relied upon due to its intermittency to fill the gap on the days in the year when demand is at a maximum. Statistics from NCG indicate that the generation from wind is less than 10% of the nameplate installed capacity for 20% of the days in the year[206].


  A comparison is given below of the relative investment requirements, costs-of-electricity, timescales, flexibilities and risk levels of the technologies that can be used for new electricity generation.

  Prices quoted are from the Royal Academy of Engineering report and other back-up sources.

  It should be noted that Clean Coal (Advanced Supercritical), whether New-Build or Retrofit, is very cost-competitive with Gas-fired CCGT. Advanced Supercritical plant will emit 23% less carbon dioxide than current old coal-fired plant. Fitted with biomass cofiring, the total carbon dioxide reduction can be 40%. Such plant can be designed to be capture-ready (ie capable of having carbon dioxide capture equipment retrofitted later). With carbon dioxide capture and storage, CO2 emissions will be less than 10% of those from the original coal-fired plant.


(a)      The cost-of-electricity for coal is given on the basis of a coal price of £30.5/te, which is the current cost of UK and world traded coal. The estimate is a company estimate supported by the RAe estimate[207].

(b)      Nuclear costs are a range encompassing the estimate from the Royal Academy of Engineering report (2.3p/kWh).

(c)      The cost-of-electricity quoted for gas—CCGT and gas CCGT with CCS—is highly dependent on the price of gas. The range quoted is for gas prices from 30p/therm to 50p/therm.

(d)      Renewables (Onshore and Offshore Wind) costs are derived from the Royal Academy of Engineering report excluding back-up generation and based on a 25% capacity factor.

(e)      Cost for CCS include Capture but not Storage. No credit is given for Enhanced Oil Recovery. Estimates from IEA GHG Programme reports[208].

(f)      There is a very wide range of estimates for IGCC ranging from £486/kW to more than £1000/kW. Promoters of IGCC in the USA indicate it is around 25% more expensive than Clean Coal (Advanced Supercritical).


  In 2004-05 the shares of the capacity portfolio were Nuclear 16%, Coal 38% and Gas 33%.

  If all the replacement capacity was to be gas, these percentages would become Nuclear 4%, Coal 18%, and Gas 66% in 2015, making the UK electricity supply system very vulnerable with respect to security of supplies, particularly in severe winters when peak electricity demand and peak demand for gas for domestic heating coincide, as well as price hikes.

21 September 2005

205   D J Spalding, G B Welford, J L King and J M Farley, "Retrofit Options for Carbon Abatement of Coal-Fired Boiler Plant", IMechE Seminar on Steam Power Plant Update, London, September 20, 2005. Back

206   National Grid PIU Supplementary Submission 28 September 2002. Back

207   Royal Academy of Engineering report, "Cost of Generating Electricity", 2004. Back

208   C A Roberts, J Gibbins, R Panesar and G Kelsall, "Potential for Improvement in Power Generation with Post-Combustion Capture of CO2", Proceedings of the 7th International Conference on Greenhouse Gas Control Technologies. Peer-reviewed Papers, Vancouver, BC, 5-9 September 2004. Back

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