Report Published: "United Kingdom Power Report Q2 2016"

From: Fast Market Research, Inc.
Published: Wed Mar 16 2016


We have incorporated plans to phase out the UK's remaining coal-fired power capacity by 2025 into our forecasts - based on our view that Amber Rudd's announcement will simply accelerate a trend that is already in play. The biggest challenge will be mobilising investment into replacement capacity amid delays to the UK's flagship nuclear project - something that could require reform of the country's existing capacity mechanism so as to incentivise gas.

Latest Updates & Structural Trends

We have decided to factor the UK's plans to close all of its coal-fired capacity by 2025 into our 10-year forecasts. There are a number of factors that underpin this forecast - not least that coal plants in the UK are already being closed down due to tightening EU emissions directives, as well as the UK's carbon price floor and plunging gas prices amid global oversupply.

Engie, for example, announced in February 2016 that it would close its 1 gigawatt (GW) Rudgely power plant in Staffordshire earlier than expected: in the summer of 2016. Utility SSE similarly announced the closure of it 2GW Fiddler's Ferry power plant in the same week. The closures are a result of declining profitability as wholesale power prices fall on the back of lower commodity prices, and a rise in carbon costs.

Full Report Details at
- http://www.fastmr.com/prod/1130912_united_kingdom_power_report.aspx?afid=301

In January 2016, the UK's Institution of Mechanical Engineers released a report stating that the UK will face an unprecedented 'energy gap' within the next 10 years. The institute claims that, without plans to stimulate investment in a fleet of new gas plants, policies to stop unabated coal-fired generation and the phasing out of nuclear reactors will combine to create a supply crunch.

The UK's latest capacity auction, which was carried out in December 2015, resulted in a clearing price of GBP18.00 per kilowatt (kW). This was marginally lower than the GBP19.00/kW price achieved at the first auction (carried out in December 2014). We believe that the mechanism is likely to be reformed in order to encourage investment in new capacity - specifically cleaner burning gas plants.

In January 2016, EDF once again delayed making a final investment decision (FID) on the UK's flagship Hinkley Point C nuclear power plant. The company has repeatedly delayed the FID amid concerns about how it will finance the project and objections from the unions (which have seats on EDF's board) over view the huge cost of the project as a threat to EDF.

The ongoing Competition and Markets Authority (CMA) investigation into high electricity and gas bills and possible collusion in the UK energy sector has again been delayed. The CMA was expected to complete its investigation by December 2015 but is now due to report in June 2016.

About Fast Market Research

Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156 (1.413.485.7001 Int'l)

You may also be interested in these related reports:

- Electrical Resistor Market in United Kingdom to 2020 - Market Size, Development, and Forecasts
- United Kingdom Petrochemicals Report Q2 2016
- Electrical Capacitor Market in United Kingdom to 2020 - Market Size, Development, and Forecasts
- Thermal Power in the UK, Market Outlook to 2025, Update 2015 - Capacity, Generation, Levelized Cost of Energy (LCOE), Investment Trends, Regulations and Company Profiles
- Nuclear Power in the UK, Market Outlook to 2025, Update 2015 - Capacity, Generation, Levelized Cost of Energy (LCOE), Investment Trends, Regulations and Company Profiles

Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001

Visit website »