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Rapid fuel switching from coal to natural gas through effective carbon pricing

Abstract

Great Britain’s overall carbon emissions fell by 6% in 2016, due to cleaner electricity production. This was not due to a surge in low-carbon nuclear or renewable sources; instead it was the much-overlooked impact of fuel switching from coal to natural gas generation. This Perspective considers the enabling conditions in Great Britain and the potential for rapid fuel switching in other coal-reliant countries. We find that spare generation and fuel supply-chain capacity must already exist for fuel switching to deliver rapid carbon savings, and to avoid further high-carbon infrastructure lock-in. More important is the political will to alter the marketplace and incentivize this switch, for example, through a stable and strong carbon price. With the right incentives, fuel switching in the power sector could rapidly achieve on the order of 1 GtCO2 saving per year worldwide (3% of global emissions), buying precious time to slow the growth in cumulative carbon emissions.

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Fig. 1: Carbon intensity of electricity generation in six countries over the last half-century.
Fig. 2: Electricity generation by fuel type in three countries over the past 25 years.
Fig. 3: Quantity of coal mined and consumed for power generation in Great Britain.
Fig. 4: Wholesale price of electricity in Great Britain with the competitive benchmark based on fuel and carbon prices.
Fig. 5: Power sector CO2 emissions by fuel source in Germany and Great Britain.
Fig. 6: Estimation of the carbon mitigation potential from fuel switching in 30 countries.

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Acknowledgements

This research was undertaken as part of the UKERC research programme EP/L024756/1, and I.S. was funded by the Engineering and Physical Sciences Research Council through project EP/M001369/1.

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Correspondence to I. A. Grant Wilson.

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Wilson, I.A.G., Staffell, I. Rapid fuel switching from coal to natural gas through effective carbon pricing. Nat Energy 3, 365–372 (2018). https://doi.org/10.1038/s41560-018-0109-0

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