university of birmingham rapid fuel switching from coal to
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University of Birmingham
Rapid fuel switching from coal to natural gasthrough effective carbon pricingWilson, I. A.Grant; Staffell, Iain
DOI:10.1038/s41560-018-0109-0
Document VersionPeer reviewed version
Citation for published version (Harvard):Wilson, IAG & Staffell, I 2018, 'Rapid fuel switching from coal to natural gas through effective carbon pricing',Nature Energy, vol. 3, no. 5, pp. 365-372. https://doi.org/10.1038/s41560-018-0109-0
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1
Rapidfuelswitchingfromcoaltonatural1
gasthrougheffectivecarbonpricing2
3
GrantWilsonandIainStaffell4
Abstract5
Britain’scarbonemissionsfellbyanextraordinary6%in2016duetocleanerelectricityproduction.6
Thiswasnotduetoasurge in low-carbonnuclearorrenewablesources; instead itwasthemuch-7
overlookedimpactoffuelswitchingfromcoaltonaturalgasgeneration.ThisPerspectiveconsiders8
the enabling conditions in Britain and the potential for rapid fuel switching in other coal-reliant9
countries. Sparegenerationandfuelsupply-chaincapacitymustalreadyexistforfuelswitchingto10
deliver rapid carbon savings, and to avoid further high-carbon infrastructure lock-in. More11
important is the political will to alter the marketplace and incentivise this switch, for example12
through a strong and stable carbon price. With the right incentives, fuel switching in the power13
sectorcouldrapidlyachieveintheorderof1GtCO2savingperyear(3%ofglobalemissions),buying14
precioustimetoslowthegrowthincumulativecarbon.15
16
Introduction17
Globalcarbonemissionsfromfossil fuelsstandatalmost37GtCO2andhavegrownbyanaverage18
2.4% per year so far this century1. While emissions had stabilised between 2014 and 2016 they19
appeartobeincreasingonceagain, intensifyingtheneedtoreduceglobalfossil fuelconsumption.20
Switchingawayfromfossilfuelsisrecognisedasa‘keymitigationstrategy’2of‘crucialimportance’321
inthetransportsector,butswitchingbetweenfossilfuelsinthepowersectorlackssuchrecognition422
asitisincompatiblewithlonger-termdeepdecarbonisation.23
Powersectordecarbonisationhasreceivedmostattentionwiththerolloutofrenewables,especially24
windandsolar,whichhavegrowntwenty-fold inthelast15yearstoreach5%ofglobalelectricity25
generation5.Carboncaptureandstorage(CCS)isoftenconsideredanessentialcomponentofleast-26
cost decarbonisation6,7; however, it may take another three decades to achieve a 10% share of27
electricity generation8, and “expectations for CCS are very low in the current environment”9 after28
continueddelaysandcancellations10.Withcumulativecarbonemissionsbeingamajordeterminant29
ofclimatechange11,anyearlyopportunitiestoreduceemissionswithinmonthsratherthandecades30
deserve attention. Fuel switching between fossil fuels cannot be a long-termoption as electrical31
2
generationfromunabatednaturalgasstillemitsaroundfourtenthsthatofcoal12;andifshalegasis32
used,upstreammethaneemissionsmayaddafurther25%toitscarbonintensity13.33
However,Britainhasrecentlydemonstratedtheshort-termimpactoffuelswitching.Displacingcoal34
withnaturalgasreducedper-capitaannualemissionsby400kgCO2between2015and2016.Given35
thelong-livednatureofenergysystemsandtheirendemicinertia,thisrateofchangeisremarkable36
in the absence of anymajor accident or disaster. Figure 1 puts these changes in context; against37
market-ledfuelswitchinginChinaandtheUS,renewablesdeploymentinGermany,andincremental38
efficiency improvements in Poland. The unprecedented deployment of nuclear power lowered39
Frenchcarbon intensityby40g/kWheachyear foradecade (1977–1986)14,15. Fuel switching can40
proceedfaster,butnotsofar:Britain’scarbonintensityfellby85g/kWhin2016,butitspotentialis41
closetoexhaustionascoalisalmosteliminated.42
43
Figure1:The carbon intensityofelectricitygeneration in six countriesover the lasthalf-century. Carbon intensity for44gross electricity output (not accounting for losses in transmissionanddistribution). The legend indicates the depthand45durationofsustainedreductionsinemissionsintensitywithineachcountry.Datafromrefs.14,15.46
This Perspective argues thatwith the right conditions, both in termsofpre-existing infrastructure47
and political will, switching away from coal has an important role to play in the rapid early48
decarbonisation of power systems. This provides immediate benefits to other sectors, which will49
decarbonisefasterthroughelectrificationduetolowerassociatedemissions.50
Britain’spowergeneration51
Coalwas the largest sourceofelectricitygeneration for the firsthundredyearsofBritain’spower52
system. This changed in the early-1990s (Figure 2)when the newly-liberalisedmarket invested in53
combinedcyclegasturbines(CCGTs),forreasonsunrelatedtocarbonmitigation16.54
0
200
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800
1970 1990 2010
Car
bon
inte
nsity
of e
lect
ricity
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O2/k
Wh)
Poland
China
Germany
US
Britain
France
–10% in 25 years to 2015
–14% in 10 years to 2015
–19% in 25 years to 2016
–23% in 10 years to 2016
–47% in 5 years to 2016
–79% in 10 years to 1986
3
Figure2:Electricitygenerationbyfueltypeinthreecountriesoverthelast25years. Importsarenotincluded,wasteis55includedwithbiomass.Between2014and2016coal+lignitegenerationfellby5%inGermany,22%intheUSand70%in56Britain.Datafromrefs.17–20.57
This ‘dash-for-gas’ inBritainwasnot replicated inGermanyorelsewhere inEurope,andalthough58
termeda‘dash’ittookeightyears(1991–99)fornewgascapacitytobebuiltandhalvecoal’sshare59
ofgenerationfrom66%to34%.Overthelastdecade,theUShasshiftedawayfromcoalandlignite60
as shale gas production significantly reduced the price of natural gas. More recently, the61
combinationoffuelswitchingandcoalplantretirementsinBritainhasseencoal’sgenerationshare62
fallthree-quartersto9%injustfouryears(2012–16);helpingtohalvepowersectoremissionsfrom63
158MtCO2in2012to78MtCO2in2016.Thisfuelswitchdrovethelargesteverannualreductionin64
BritishpowersectorCO2emissions21of25MtCO2in2016.65
Figure2showsthatrenewablegenerationexpandedrapidlyoverthelastdecadetosupplynearlya66
fifthofBritain’selectricity. However,thefall incoalgenerationbetween2015and2016wasfilled67
entirelybynaturalgas:coaloutputfell46TWhandgasoutputincreased43TWh,whilezero-carbon68
renewables changed by less than 1 TWh due to underlying weather conditions22. For context,69
Britain’sswitchfromcoaltogasin2016wasgreaterthanallotherEuropeancountriescombined23.70
Ifsustained,thisrapidreductionarguablyputsBritainwellaheadofitsnear-termcarbonreduction71
trajectory, as it could nowbeat its carbon targets for 2018-22within the timeframeof the2013-72
2017 carbon budget24. However, as power sector emissions are part of the EU Emissions Trading73
Scheme (referred to as the traded sector), the net UK carbon accounting25 means that these74
reductionscanbe‘exported’fromthepowersectorasasurplustootherpartsofthetradedsector75
(e.g.heavyindustry)potentiallyinothercountriesinEurope.Underagreedcarbonaccountingrules,76
they cannot be allocated to, or purchased by the non-traded sectors in Britain (e.g. domestic77
transportorheat)toprovideadditionalcarbonheadroom26.Nevertheless,thesignificantreduction78
in electricity carbon intensity provides a direct benefit for decarbonising these sectors through79
electricvehiclesandheat.80
0
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400
1990 1995 2000 2005 2010 2015
Elec
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atio
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Wh)
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Solar Wind Hydro
56%
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il0
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Oil Coal Lignite
65%
foss
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4
Britain’scommitmenttoreducecoalpower81
DuringtherunuptoCOP21 inParis, theBritishgovernmentbeganconsultingonthephase-outof82
unabated coal by 202527,28, marking the world’s first commitment to abandoning coal power29.83
Although this deadline helps frame the Government’s commitment to decarbonisation, there is84
concern that early power station closures pose an unacceptable security of supply risk. From85
anotherperspective,itisfeltincreasinglyimportanttoremoveunabatedcoalassoonasispractical86
tofreeupitsmarketsharefornew,cleanergeneration30.87
SchedulingthedemiseofBritain’scoalgenerationhasbeeneasedbythefleet’sage(80%areover88
30yearsold),andtighteningairpollutioncontrolssuchastheIndustrialEmissionsDirective31.Halfof89
Britain’s coal capacity (14.3 GW) closed in the 5 years to 2017, and those that remain have90
historicallylowutilisation.Coalprovidedlessthan10%(28TWh)ofelectricalgenerationin2016;a91
smallercontributionthanwind(30.5TWh)and lessthansolargenerated inGermany(37.5TWh)3292
overthesameyear.93
Britain isthereforeontracktobecomethefirstmajoreconomytotransitionawayfromcoalafter94
centuriesofproductionand consumption (Figure3). The latter fell to12Mt in201633, levelsnot95
seensince193534.Therateofthischangeisunprecedented;ittook14yearsforpowersectorcoal96
demandtoincreasefrom12to28milliontonnesperannum(1936to1950),butonly1yeartomake97
the reverse transition (2015 to2016). Britain couldbe the first country to leave its coal reserves98
unburnt in the ground35, and in November 2017 it set out a global alliance to end coal power99
generation36.Thiswouldhavebeeninconceivabletopolicymakersevenagenerationago,whencoal,100
nuclearandoilgenerationpoweredthecountry16.101
102
Figure3:QuantityofcoalminedandconsumedforpowergenerationinBritain.Powersectordatafromref.17andcoal103productiondatafromrefs.33and34.104
0
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1850 1870 1890 1910 1930 1950 1970 1990 2010
Mill
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Consumed for power
5
[BOX1starts]FactorsthatenabledBritain’srapidfuelswitch105
Britain’s experience of fuel switching can be viewed as a policy success, albeit at a rate thatwas106
betterthananticipated.Wesuggestfourfactorswerenecessarytoachievethisrapidfuelswitch:107
• Gasgenerationplantswerealreadybuiltandhadspareunderutilisedcapacity;108
• Existingfuelsupplyinfrastructurecouldcopewiththeincreasedpowersectorgasdemand;109
• Thepoliticalwillwasavailableto intervene inmarketsto incentivisetheswitch,penalising110
coalvs.gasgenerationviaaneffectivecarbonprice.111
• Coalandgaspricesweresufficientlyclosesothatswitchingdidnotinflictlargepriceriseson112
electricity consumers (a carbon price of £50/twas needed to incentivise fuel switching in113
2013,vs.£16/tin2016)12.114
RenewablegenerationhasalsorapidlyincreasedinBritain,loweringemissionsoverthelastdecade,115
butcontrastingFigure2andFigure5,significantreductionsonlyoccurredsincethe2013increasein116
carbonprices,duetofallingcoalemissions.117
Whileputtingapriceoncarbonenabledthefuelswitchin2015toberapid,thedevelopmentofthis118
policy and the enabling conditions and the investment in generation and infrastructure for the119
switchtotakeplaceweredecadesinthemaking.TheEULargeCombustionPlantDirective(2001)37120
and IndustrialEmissionsDirective (2010)31aided inclosinghalfofBritain’scoalcapacity;whilethe121
Climate Change Act (2008)38 and Electricity Market Reform (2013)39 laid the foundations for the122
CarbonPriceSupportscheme.123
[BOX1ends]124
Puttingapriceoncarbon125
Ourviewisthattheprimarydriverforcoal’ssubstitutionin2015–16wasthehigherpriceplacedon126
carbon emissions. Since 2005 British power stations were subject to the EU Emissions Trading127
Scheme (ETS) but it delivered carbon prices that were tooweak to drive sustained lower-carbon128
investment40–43. To address this, Britain introduced the Carbon Price Support (CPS) policy in 2013129
which required power-sector emitters to pay a top-up price to a Carbon Price Floor (CPF)130
determinedbypolicymakers44.Thisaimstoprovidegeneratorswiththecertaintyofamorestable131
(buthigher)priceofCO2thandeliveredbytheEU-widemarketalone.132
ThisCPSpolicyisstillsubjecttoregulatoryriskasthefloorpricecanbechanged.Itsinitialtrajectory133
wasrisingtowards£70/tCO2in2030;however,successiveannouncementshavefrozentheCPFatits134
2017 levelof£18/tCO2at leastuntil2021. While this suggestsdiminishedambition in the faceof135
6
cost sensitivities, it should be compared to an EU-ETS price of approximately €5/tCO2 throughout136
2016.137
Debate continues about the floor price45–47. Whilst it has been effective in promoting the switch138
from coal to existing natural gas generation, it has failed to incentivise construction of new low-139
carbon generation, which continue to require other forms of financial support. The cost to140
consumers can be approximated from the left panel of Figure 4 as the gap between the actual141
electricityprice,andtheestimatedcostofthemarginalfuel(whicheverismoreexpensive,gasand142
coal).Weestimatethecarbonpricefloorhasaddedintheregionof0.7p/kWhtoretailprices(~5%)143
during2016,whichiscomparablegovernmentanalysis48andestimatesforUKindustry49.Thisprice144
rise is verymodest considering the~25% reduction inpower sector emissions it facilitated in just145
oneyear.146
Figure4:ThewholesalepriceofelectricityinBritainwiththecompetitivebenchmarkbasedonfuelandcarbonprices.a147electricitypricesarecomparedwiththeestimatedcostofgenerationfromcoalandgaswithnocarbonprice.bshowsthe148comparison includingtheprevailingcarbonprice inBritain,alongwiththeshareoftotalelectricitygenerationfromcoal.149Electricitypricesare fromtheday-aheadspotmarket.Generationcostconsistsof fuelcombusted (dividedbyconversion150efficiency) and carbon emitted (multiplied by carbon price), neglecting other aspects such asmaintenance and network151charges. Pricesand costshavequarterly resolution, the coalgeneration sharehasannual resolution. Carbonpricedata152fromrefs.44and50,fuelpricedatafromref.51,electricitypriceandcoalsharedatafromref.12.153
ThecostsofelectricitygenerationareshowninFigure4,highlightingthefallingcostofgasrelative154
tocoalsince2014.However,coalwouldstillbethecheapestformofgenerationwiththeEuropean155
ETS carbon price, despite the sharp rise in international coal prices through 2016 (due to China156
cutting production by 10%)52. Instead, the CPF allowed gas generation to become equivalent or157
cheaper since the beginning 2016 and displace coal’s share of generation. In terms of historical158
precedence, the carbon price in Britain has been raised back to its level in 2008. In the rest of159
Europe,itremainsatjustone-thirdofitspeak.160
£0
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Shar
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7
Fuel switching is not unidirectional, and could equally be reversedwhile coal generation capacity161
remainsavailableoverthecomingyears,helpedbycapacitymarketpayments.Allthiswouldtakeis162
another shift in relative fuel prices or a weakening of the carbon price to increase coal’s annual163
marketshare.164
Leavingthemarketstoit165
Britain’s experience shows that liberalmarkets can rapidly adjust towell-timedwell-aimed policy166
signals.Policyisnotanessentialingredientthough,asAmericademonstratesthataconfluenceof167
market factors candrive fuel switchingalone, albeit at a slowerpace.53–55 Since2005natural gas168
priceshave fallen70%compared to25% for coaldue to increasedproductionand the inability to169
export shale gas5 (due to insufficient infrastructure). This has lowered the US average carbon170
intensityofelectricitybyaquarter(seeFigure1),witha7%swingfromcoaltogasoccurringin2015,171
reducingpowersectoremissionsbyaround133Mt56.172
ThepoliticallandscapechangedwiththeelectionofPresidentTrumpinNovember2016,suggesting173
ongoingtensionsbetweenFederaleffortstoreviveanailingcoalsector,andmanyStatepoliciesthat174
focus on decarbonisation. Carbon pricing at a federal levelwhichwould accelerate fuel switching175
from coal to natural gas is therefore improbable under the Trump administration. The US has a176
complex range of political drivers from federal environmental regulations impacted by sector177
lobbying, layeredwith further political drivers at state level.Within thismelange of political and178
market forces, it isdifficult to suggest future levelsof fuel switchingwithanydegreeof certainty.179
Federal regulationshave switchedbackand forth to favourdifferent technologies,which suggests180
thebenefitofhavinglegalmulti-decadaltargetstoaimfor.Britainisnotimmunefromlobbyingand181
switchingregulationsbackandforthtosuitdifferenttechnologies,but ithaspioneeredtheuseof182
long-term legal targets in the2008ClimateChangeAct38.Thishaskept the long-termambitionon183
track regardless of the change of policymakers and the political pressure to rescind policies that184
becomeunpopularwithcorevoters.185
PotentialforfuelswitchinginGermany186
Germany is regardedasachampionof renewableenergy for itsextensive investment inwindand187
solarpower.However,ithashadlimitedsuccessindecarbonisingitspowersector,withemissions188
down15%since1990,comparedtoBritain’sreductionof61%.Figure5showsthatGermany’slack189
ofprogressisduetocontinuedrelianceonligniteandhardcoalfor>40%ofelectricitysupply.190
8
Figure5:Power sector CO2 emissions inGermany andBritain, broken downby fuel source. The carbon price in each191countryisoverlaid,showingthemarkeddifferencesincetheintroductionoftheUK’sCarbonPriceFloorin2013.It isour192viewthatthiswasthemajoradditionalfactorthatcausedtherapidshiftfromcoaltonaturalgasgenerationafter2013.193datafromrefs.17and18,emissionsintensitiesfromrefs.32and12,andcarbonpricesfromrefs.44and50.194
Germany is self-sufficient for lignitebut imports 89%of its hard coal57, as its geologymakes local195
production internationally uncompetitive. Import dependency for natural gas is similarly 90%,196
althoughonlyone-sixthofdemand is fromthepowersectorasgas isprimarilyusedforheating18.197
Around 15bcm/year (~150 TWh/year) of spare capacity exists in the Nordstream pipeline for198
increased gas supplies58, with an additional 55bcm/year (540 TWh/year) if Nordstream 2 is199
constructed. At a national level, it seems the fuel supply infrastructure has the potential to200
accommodatesignificantlevelsoffuelswitching.201
However, several reasons temper Germany’s desire to take this route, not least the security202
implicationsofswappingindigenouslignitetoimportednaturalgas.Germany’sdecisiontoremove203
nucleargenerationprovidesanadditionalchallenge:installing60GWofwindandsolarpowerinthe204
last decade has done little more than offset the lost output from the 10 GW of retired nuclear205
power32. Both considerations were not applicable to Britain, which has no lignite mines, and in206
contrast to Germany, is embracing new nuclear build. Germany is a fascinating interaction of207
political economy interests, with a lignite lobby that capitalises on security of supply and cost208
argumentsforGermany’senergytransition.However,withoutthedevelopmentofCarbonCapture209
andStorageinGermany(whichcurrentlyseemshighlychallenging)atsomepointlignitegeneration210
will be impossible to reconcile with decarbonisation targets, and Britain’s experience shows this211
couldberapidlyreducedgivenGermany’spre-builtbutunderutilisedgasgenerationcapacity.212
£0
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Germanyhas24GWof gas-firedpower stations, compared to28GWofhard coal and21GWof213
lignite32. In recent years, nearly-new gas power stations have been mothballed after proving214
unprofitable,andeventuallyexportedtotheMiddleEast59.Thisisbecausegascapacityliesmostly215
unused,with18%utilisationvs.40%forhardcoaland74%forlignitein201618. Anadditional155216
TWhofelectricitycouldbeproducedifthisgasgenerationcapacitywereutilisedat80%,sufficient217
tocompletelyeliminatehardcoalplusfour-tenthsofligniteproduction,whichwouldcutGermany’s218
powersectoremissionsbyaroundaquarter,or62MtCO2peryear.219
Greater emissions savings would result from displacing lignite. However, this would increase220
primaryenergyimportdependency;whereasswitchingfromhardcoaltonaturalgaswouldsimply221
switchonetypeofenergyimportsforanother,introducingadifferentsetofrisks.222
Potentialforfuelswitchingglobally223
Quantifying an accurate global potential for fuel switching requires a detailed country-by-country224
analysis of infrastructure, generation and demand, prices and policies. Nonetheless, the broad225
order-of-magnitudecanbeestimatedusingstatisticsforannualgenerationandinstalledgenerating226
capacity. We estimate the potential for fuel switching in the 30 largest coal consuming nations227
(covering 97% of global coal capacity) by compiling the amount of coal and lignite generation in228
2015, and comparing this to theadditional generation that could come fromgas in each country.229
This is based on existing, underutilised gas generation; disregarding the option of building new230
capacity.Themaximumgasgenerationpotentialassumesthatcombined-cyclegasturbines(CCGTs)231
couldrunupto80%utilisation(limitedbyavailabilityanddowntime),whileopen-cycle(OCGTs)and232
steamboilerstationswouldbelimitedto0–40%utilisation(duetoeconomicrationale).Displacing233
coalwithsingle-cycle(ratherthancombined-cycle)gasstationswouldyieldhalfthecarbonsavings234
due to their lower efficiency and thus higher carbon intensity. We assumeCO2 emissions of 405235
g/kWh forCCGTsand710g/kWh forOCGTs, relative to1025±55g/kWh fornational coal fleets14.236
Sources,detailsandjustificationaregivenassupplementaryinformation.237
Figure 6a shows the potential for fuel switching across the OECD and coal-reliant developing238
countries. Many European countries (including Britain) have over-built power systems with239
sufficient idlegascapacity tocompletelyeliminatecoal,at leastat theannualaggregate level. Of240
thelargestcoalconsumers,RussiaandtheUScouldconvert40–50%oftheircoalgenerationtogas,241
butChinaandIndiacouldonlydisplace6–12%duetothevastscaleoftheircoalfleets.242
Polanddependsonsolidfuelsforover90%ofitselectricity,andlacksthepre-existinggasplantsto243
takeovermarketshare60.JapanisstillgrippedbyacapacityshortageinthewakeoftheFukushima244
disasterandshutdownofitsnuclearfleet,thusitsgasstationsarerunningclosetocapacityalready.245
10
Figure6bshowsthatiffuelswitchingwasfullyrealisedinthese30countries,annualemissionscould246
fallby0.8–1.2GtCO2,around3%ofglobalemissions.ReductionsinChina,IndiaandEuropeamount247
to440MtCO2peryear,andareinsensitivetotheutilisationofsingle-cycleplantsasthesemakeup248
onlyafifthoftheirgasfleet.ThemitigationpotentialintheUSandRussiaismoresensitivetothe249
assumedutilisation,asOCGTsandsteamboilersformhalftheirgascapacity.250
Figure6:Estimationofthecarbonmitigationpotentialfromfuelswitchingin30countries.aComparisonofoutputfrom251coalpowerstationsin2015withthepotentialforadditionalgasgeneration,ifexistingcombined-cyclegasplantsoperated252at80%utilisationandsingle-cycleplantsat20%(withbarsshowing0%to40%). bTheannualgreenhouse-gasemission253savings if the identified potential for fuel switching was realised across these countries, showing the sensitivity to the254utilisationofsingle-cyclegasplants.Inpanela,countriesareidentifiedusingtheirtwo-letterISOcodes,anddiagonallines255highlighttheshareofcoalthatcouldbedisplacedbygas.Coloursareusedtogroupcountriesintothegeographicregions256listedinthelegendofpanelb.Thefourcountrieswithzeropotentialforadditionalgasoutputareshownbelowtheaxis.257Datafromsourceslistedinthesupplementaryinformation.258
NoSilverBullet259
While thisanalysis isonlya first-orderapproximation, it suggests that fuel switching in thepower260
sector could provide a significant boost to global decarbonisation. However, fuel switching is no261
silverbullet,andmanybarrierscanexplainwhyonlyasmallpercentageoftheestimatedpotential262
hasbeenrealisedthusfar.263
Fuel switching will change supply-chain and energy security risks, and in many countries would264
create political tensions by increasing import dependency for primary energy. Although265
employmentinthecoalsectorhasfallendramaticallyinmanywesterncountries,policieswhichare266
seentofurtherdecimatedomesticminingindustrieswill faceopposition,asseeninAmerica.Over267
the longer term, politiciansmust grapplewith the consequences of transitioning away from solid268
fuels; notably how to engage and retrain affectedmining communities where coal production is269
culturallysignificant,aswellasasourceofemployment.270
CN
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Maximum utilisation of single-cycle gas (with fixed 80% for combined-cycle gas)
Rest of WorldRussiaUSEuropeBritainIndiaChina
11
Therearealsoriskswithcarbon leakage inhighly interconnectedmarketssuchasGermany61,62. A271
strong carbonprice to promote fuel switching can reducewithin-country emissions, butmay also272
shift electricity production (and thus carbon emissions) to areas subject to a lower carbon price.273
Britainnowimportshigh-carbonelectricityfromtheNetherlands,wherecoalusageincreased40%274
and generators pay one-fifth the carbon price. Supranational harmonisation of carbon pricing is275
neededtoavoidthe'offshoring'ofpowersectoremissions.Otherconsiderations,suchasthelevel276
ofmethaneleakageinthenaturalgassupplychainmustalsobecarefullyassessed63,64.277
Carbonpricinghowever isnotablanketpolicythatwillworkeverywhere. Incountrieswhich lack278
thegasinfrastructuresuchasPolandorJapan,raisingacarbonpricewouldintheshorttermbeno279
less blunt than a blanket tax on electricity. In the longer term, a careful balance is needed to280
redirecthowexistinginfrastructurecouldbeusedwithoutgoingsofarastoincentivisebuildingnew281
gas infrastructureandavoidable carbon lock-in. Ifnomorecarbonemittingelectricitygeneration282
canbebuilt fora2°Ctemperaturerise toremain likely65, thedistinctionbetweenutilisingexisting283
gasgenerationversusinvestinginadditionalcapacityisofcriticalimportance66,67.284
Conclusions285
Switchingbetweenfossilfuelscanonlyeverbeatemporarysteppingstone.Itspotentialisbounded286
by the scale of existing coal and gas infrastructure, and natural gas is incompatible with deep287
decarbonisation68,69unlesscarboncaptureandstorageemergesfromits‘valleyofdeath’10.Ifspare288
capacity already exists, then fuel switching does not require several years towind up tomaterial289
emissions savings, unlike other key options (renewables, nuclear, efficiency improvements). The290
‘quickwin’isprovidedsimplybyusingpre-existinginfrastructuremoreeffectively.291
Britain’sexamplehighlightstheeffectivenessundercertainkeycircumstancesofplacingamodest,292
butstable,£18/tCO2oncarbon,andthespeedwithwhichthepowersectorgenerationchangedin293
responsetosuchasignal;itswitched15%ofitsgenerationmix(45TWh)inasingleyear,saving25294
MtCO2. Fuel switching can demonstrably achieve very rapid carbon reductions. In comparison295
renewables tooksixyears togrowfrom4%to19%ofBritain’sgeneration (a45TWh/yr increase),296
savingapproximately12 22MtCO2. Itwill be at least 10 yearsbeforenewnuclear capacitywill be297
builtinBritain59,whichwouldrequirethreeprojectsthesizeofHinkleyPointCtosave27MtCO2per298
year70tofuelswitchfromnaturalgas(ascoalwillnolongerbeonthesystem).299
Fuelswitchingcanalsobeacost-effectiveandconvenientformofdecarbonisation.Ifdrivensolely300
bymarketforcesitwilllowerbills;ifpolicysupportaltersthebalancebetweenclosely-pricedfuels,it301
canhaveminimal impactonconsumers,asseen inBritain. Naturalgas retains theenergysystem302
benefits of being a fuel: controllable and dispatchable generation, and extensive storage303
12
infrastructurewithdaystoweeksofcapacity,ratherthanminutestohoursforelectrochemicaland304
thermalstorage71,72. Controllableflexibilityis increasinglydesirabletoaccommodategreaterlevels305
of variable renewable energy generation, especially so if coal generation is simultaneously being306
retired.307
Anthropogeniccarbonemissionshadalmostplateaued73.Thenext,momentousstep,foremissions308
todecrease,couldbecatalysedbyaconcertedglobalefforttoswitchawayfromcoaltonaturalgas.309
Our initial examination suggests the top 30 coal consuming countries could prevent 1 GT of CO2310
emissionsfromenteringtheatmosphereannually;withacentralestimatethat20%oftheworld’s311
coalcouldbeswitchedtogasusingexisting,under-utilisedinfrastructure(therangeis13%withno312
OCGTupto27%withthemrunningat40%utilisation).Thisprovidesanimmediatebenefittoslow313
theincreaseincumulativecarbonemissions,buyingall-importanttimeforothersectorstocatchup,314
andprovidingcleanerelectricitywithwhichtodecarbonisethem.Anyefforttofront-loademissions315
reductionswilleasethepressureonfuturegenerationswhoarefacedwithremovingemissionsback316
out of the atmosphere74. However, it is vital to cumulative emissions that the gains of early317
decarbonisationfromfuelswitchingarenotsquanderedbytheextendeduseofgasgenerationasa318
substituteforthenecessaryincreaseinlow-carbontechnologies.319
The potential for rapid andmaterial global emissions reductions appears to have gone unnoticed320
thusfar;itisabouttimethatthebenefitsoffuelswitchingdeservedgreaterattention.321
Acknowledgements322
We thank the reviewers for their valuable feedback. This researchwas undertaken as part of the323
UKERC research programme EP/L024756/1, and IS was funded by the Engineering and Physical324
SciencesResearchCouncilthroughprojectEP/M001369/1.325
326
327
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