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The escalating cost of coal

Cottam power station

The cost of coal itself makes up a large portion of the operating costs of a coal-fired power station. The UK currently relies heavily on imported coal, so the price of coal on the international market has a significant effect on the cost of generating electricity using a coal-fired power station.

This international market price is affected by global supply and demand, and demand is expected to grow in developing economies, which could lead to coal becoming more expensive. Operators of coal-fired power stations in the UK paid about 22% more for coal in 2010 than in 2009.

Carbon footprint

Burning coal releases greenhouse gases. Both the UK Government and the European Union charge power station operators for greenhouse gas emissions, and these charges are expected to keep increasing.

As part of its commitment to significantly reduce the UK's greenhouse gas emissions by 2050, the Government has ruled that any new coal-fired power stations built in the UK must incorporate carbon capture and storage (CCS) technology. CCS traps carbon dioxide (CO2) from fossil fuel power stations before it can be released into the atmosphere, and stores it indefinitely underground. CCS has not yet been proven to work on an industrial scale. Incorporating CCS into coal-fired power stations is expected both to incur an extra upfront cost (to install the equipment) and to decrease the plant's efficiency, making it more expensive to operate.

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