Polluting coal-fired power plants could make a comeback unless the government increases the carbon tax, new analysis suggests.
The amount of electricity generated by burning coal in Britain has fallen to historic lows over the past year, as ageing coal power stations struggle to compete with gas plants.
A report by Aurora Energy Research has found that the carbon tax, which penalises dirtier coal more heavily than gas, has been “instrumental” in this change, along with cheap gas prices. However, it forecasts that coal plants could enjoy a revival in the early 2020s because coal is likely to become relatively cheaper than gas.
“The competitiveness of coal generation is expected to improve post-2020 relative to gas as recent restrictions on coal production in China are