Coal power shutdown: A big step forward in the UK’s Net Zero Journey

Following the shutdown of the UK’s last coal-fuelled power station in September 2024, we take a look at what it means for the UK’s journey to Net Zero...

For over a century, coal was at the heart of the UK’s energy story. It powered trains, factories, and eventually the electric grid, fuelling the industrial growth of a nation. On 30th September 2024, the UK switched off its last coal-fired power station, Ratcliffe-on-Soar, a historic milestone that signalled both the end of an era and a bold step toward a cleaner, more sustainable future. 

In this article, we’re going to explore the reasoning behind this decision and its far-reaching implications – from environmental targets to energy stability and potential impacts on prices, and take a closer look at how these changes will impact the energy market and the insights you can share to engage more deeply with this evolving landscape… 

How did we get here? The end of coal production in the UK 

From 1882 until Ratcliffe’s closure, the UK’s coal plants will have burned through 4.6bn tonnes of coal and emitted 10.4bn tonnes of carbon dioxide (CO2) – more than most countries have ever produced from all sources.  

Source: Carbon Brief

Coal’s story in the UK is one of both dominance and eventual decline.   

The world’s first coal-fired power station, the Holborn Viaduct, was built in 1882 by Thomas Edison – to help light the streets of London. At its peak in the mid-20th century, coal production in the UK was extensive, with more than 200million tonnes extracted annually to meet the country’s energy needs.  

But the environmental costs were mounting. Coal-fired energy releases significant carbon dioxide (CO₂) which is one of the primary drivers of climate change, and comes with a host of other environmental impacts – from air pollution to ecosystem disruption. The UK’s coal-power phaseout will help push overall coal demand to levels not seen since the 1600s. 

Over the past few decades, cleaner energy alternatives like natural gas, wind, and solar have emerged as viable replacements. Not only do these sources produce far fewer emissions, but they’ve also become increasingly affordable and reliable.  

UK government policies, including stringent emissions regulations, carbon pricing, and dedicated investments in renewable infrastructure (including the creation of GB Energy), have further accelerated coal’s decline. 

So, here we are in 2024, witnessing the final coal power switch-off, which brings us to the big question: what does the end of coal really mean for the UK’s journey to Net Zero? 

Coal phase-out: A major Net Zero milestone reached 

Achieving “net zero” is no small feat. It essentially requires balancing the amount of greenhouse gases we emit with the amount we remove from the atmosphere. Phasing out coal, one of the most carbon-intensive energy sources, brings the UK a significant step closer to this goal. 

This move is already having a measurable impact. Over the past 20 years, emissions from the power sector—the UK’s largest historical source of emissions—have plummeted by over 70%.  

Today, renewables like wind and solar provide over 40% of the UK’s electricity, making a critical contribution to reducing emissions and enabling the country to meet its ambitious climate targets for 2030 and beyond. 

While the UK’s commitment to net zero may sometimes feel like an abstract goal, the coal shutdown makes it very real. The shift not only demonstrates national progress toward lower emissions, but it also strengthens the message that cleaner energy is becoming the new normal. 

Implications for energy supply and stability 

With coal officially out of the energy mix, some might wonder about the stability of the UK’s energy supply. Can renewables alone reliably “keep the lights on”? 

While renewables like wind and solar are incredibly promising, they also come with challenges: they’re variable, meaning their output depends on weather conditions that can be difficult to predict.  

To manage this variability, the UK relies on several solutions: 

  •  natural gas and nuclear power for consistent backup 
  •  emerging technologies like battery storage to store excess energy for times of high demand, and  
  • digital innovations that enable efficient grid management 

As these technologies continue to evolve, they’re making it increasingly feasible for the UK to meet its energy needs with minimal disruption. By leveraging a diversified energy mix, the UK aims to maintain stability while moving toward cleaner sources – a balancing act for the National Energy System Operator (NESO) that is essential as coal exits the stage. 

The impact on energy prices 

One of the questions that inevitably arises, is “what does this transition means for energy prices?” 

Historically, coal was a low-cost and steady source of power. But as the environmental costs became clear, coal-fired energy started to incur higher costs, largely due to carbon taxes and emissions trading schemes. 

As the UK’s energy portfolio has diversified, prices have stabilised to a degree, but they remain subject to the shifts inherent in a changing energy market. 

The good news is that renewables, although (often) requiring significant upfront investment, are generally affordable to operate over the long term. Though price fluctuations are likely to persist as the system continues to adapt, the overall expectation is that renewables will ultimately help reduce energy costs.  

Of course, the energy market is a global ecosystem, meaning prices will continue to be influenced by international fuel costs, market demand, and geopolitical factors. 

How the energy market and consumers are affected by the transition 

The ripple effects of the coal phase-out extend beyond the power sector, impacting businesses, industries, and everyday consumers alike. 

Heavy energy users, such as manufacturing plants, will need to adapt to a renewables-centred market, which may involve exploring energy storage options or demand-response strategies to optimise costs and minimise disruptions. And the government introduced a range of business energy savings and reporting schemes designed to help non-domestic consumers adopt cleaner energy solutions and more environmentally friendly operating practices.  

For residential consumers, the shift is already underway, with many households adopting solar panels and even generating excess power to sell back to the grid. Government incentives for installing electric vehicle (EV) charging points are further helping consumers engage directly with cleaner energy systems.  

These changes not only reflect the country’s climate goals but also present a chance for consumers to enjoy more sustainable energy at a potentially lower cost in the long run. 

For brokers and other professionals in the energy space, these transitions highlight the importance of staying informed. A nuanced understanding of these shifts enables more effective discussions with clients, offering them the insights they need to adapt strategically. 

The path forward: What’s next in the UK’s energy transition? 

With coal retiring from the energy mix, the UK’s journey to Net Zero is far from over. The government is actively investing in offshore wind farms, nuclear power, and advanced storage technologies to create a resilient, low-carbon energy future. 

 Promising new technologies, including hydrogen fuel and carbon capture, are also beginning to play a role, expanding the country’s options for clean energy production. 

The digital transformation of the energy sector is another exciting frontier. Innovations in artificial intelligence and data management are helping to create a smarter, more responsive grid.  

These advancements will be critical as the UK moves to fully integrate renewable sources into its energy network, making it not only cleaner but also more adaptable to changing needs.  

For more information on renewable energy options available through OnlineDIRECT, please contact your Bespoke Account Manager.