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Rapid fuel switching from coal to natural gasthrough effective carbon pricingWilson, I. A.Grant; Staffell, Iain

DOI:10.1038/s41560-018-0109-0

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Citation for published version (Harvard):Wilson, IAG & Staffell, I 2018, 'Rapid fuel switching from coal to natural gas through effective carbon pricing',Nature Energy, vol. 3, no. 5, pp. 365-372. https://doi.org/10.1038/s41560-018-0109-0

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Download date: 02. Jan. 2022

1

Rapidfuelswitchingfromcoaltonatural1

gasthrougheffectivecarbonpricing2

3

GrantWilsonandIainStaffell4

Abstract5

Britain’scarbonemissionsfellbyanextraordinary6%in2016duetocleanerelectricityproduction.6

Thiswasnotduetoasurge in low-carbonnuclearorrenewablesources; instead itwasthemuch-7

overlookedimpactoffuelswitchingfromcoaltonaturalgasgeneration.ThisPerspectiveconsiders8

the enabling conditions in Britain and the potential for rapid fuel switching in other coal-reliant9

countries. Sparegenerationandfuelsupply-chaincapacitymustalreadyexistforfuelswitchingto10

deliver rapid carbon savings, and to avoid further high-carbon infrastructure lock-in. More11

important is the political will to alter the marketplace and incentivise this switch, for example12

through a strong and stable carbon price. With the right incentives, fuel switching in the power13

sectorcouldrapidlyachieveintheorderof1GtCO2savingperyear(3%ofglobalemissions),buying14

precioustimetoslowthegrowthincumulativecarbon.15

16

Introduction17

Globalcarbonemissionsfromfossil fuelsstandatalmost37GtCO2andhavegrownbyanaverage18

2.4% per year so far this century1. While emissions had stabilised between 2014 and 2016 they19

appeartobeincreasingonceagain, intensifyingtheneedtoreduceglobalfossil fuelconsumption.20

Switchingawayfromfossilfuelsisrecognisedasa‘keymitigationstrategy’2of‘crucialimportance’321

inthetransportsector,butswitchingbetweenfossilfuelsinthepowersectorlackssuchrecognition422

asitisincompatiblewithlonger-termdeepdecarbonisation.23

Powersectordecarbonisationhasreceivedmostattentionwiththerolloutofrenewables,especially24

windandsolar,whichhavegrowntwenty-fold inthelast15yearstoreach5%ofglobalelectricity25

generation5.Carboncaptureandstorage(CCS)isoftenconsideredanessentialcomponentofleast-26

cost decarbonisation6,7; however, it may take another three decades to achieve a 10% share of27

electricity generation8, and “expectations for CCS are very low in the current environment”9 after28

continueddelaysandcancellations10.Withcumulativecarbonemissionsbeingamajordeterminant29

ofclimatechange11,anyearlyopportunitiestoreduceemissionswithinmonthsratherthandecades30

deserve attention. Fuel switching between fossil fuels cannot be a long-termoption as electrical31

2

generationfromunabatednaturalgasstillemitsaroundfourtenthsthatofcoal12;andifshalegasis32

used,upstreammethaneemissionsmayaddafurther25%toitscarbonintensity13.33

However,Britainhasrecentlydemonstratedtheshort-termimpactoffuelswitching.Displacingcoal34

withnaturalgasreducedper-capitaannualemissionsby400kgCO2between2015and2016.Given35

thelong-livednatureofenergysystemsandtheirendemicinertia,thisrateofchangeisremarkable36

in the absence of anymajor accident or disaster. Figure 1 puts these changes in context; against37

market-ledfuelswitchinginChinaandtheUS,renewablesdeploymentinGermany,andincremental38

efficiency improvements in Poland. The unprecedented deployment of nuclear power lowered39

Frenchcarbon intensityby40g/kWheachyear foradecade (1977–1986)14,15. Fuel switching can40

proceedfaster,butnotsofar:Britain’scarbonintensityfellby85g/kWhin2016,butitspotentialis41

closetoexhaustionascoalisalmosteliminated.42

43

Figure1:The carbon intensityofelectricitygeneration in six countriesover the lasthalf-century. Carbon intensity for44gross electricity output (not accounting for losses in transmissionanddistribution). The legend indicates the depthand45durationofsustainedreductionsinemissionsintensitywithineachcountry.Datafromrefs.14,15.46

This Perspective argues thatwith the right conditions, both in termsofpre-existing infrastructure47

and political will, switching away from coal has an important role to play in the rapid early48

decarbonisation of power systems. This provides immediate benefits to other sectors, which will49

decarbonisefasterthroughelectrificationduetolowerassociatedemissions.50

Britain’spowergeneration51

Coalwas the largest sourceofelectricitygeneration for the firsthundredyearsofBritain’spower52

system. This changed in the early-1990s (Figure 2)when the newly-liberalisedmarket invested in53

combinedcyclegasturbines(CCGTs),forreasonsunrelatedtocarbonmitigation16.54

0

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France

–10% in 25 years to 2015

–14% in 10 years to 2015

–19% in 25 years to 2016

–23% in 10 years to 2016

–47% in 5 years to 2016

–79% in 10 years to 1986

3

Figure2:Electricitygenerationbyfueltypeinthreecountriesoverthelast25years. Importsarenotincluded,wasteis55includedwithbiomass.Between2014and2016coal+lignitegenerationfellby5%inGermany,22%intheUSand70%in56Britain.Datafromrefs.17–20.57

This ‘dash-for-gas’ inBritainwasnot replicated inGermanyorelsewhere inEurope,andalthough58

termeda‘dash’ittookeightyears(1991–99)fornewgascapacitytobebuiltandhalvecoal’sshare59

ofgenerationfrom66%to34%.Overthelastdecade,theUShasshiftedawayfromcoalandlignite60

as shale gas production significantly reduced the price of natural gas. More recently, the61

combinationoffuelswitchingandcoalplantretirementsinBritainhasseencoal’sgenerationshare62

fallthree-quartersto9%injustfouryears(2012–16);helpingtohalvepowersectoremissionsfrom63

158MtCO2in2012to78MtCO2in2016.Thisfuelswitchdrovethelargesteverannualreductionin64

BritishpowersectorCO2emissions21of25MtCO2in2016.65

Figure2showsthatrenewablegenerationexpandedrapidlyoverthelastdecadetosupplynearlya66

fifthofBritain’selectricity. However,thefall incoalgenerationbetween2015and2016wasfilled67

entirelybynaturalgas:coaloutputfell46TWhandgasoutputincreased43TWh,whilezero-carbon68

renewables changed by less than 1 TWh due to underlying weather conditions22. For context,69

Britain’sswitchfromcoaltogasin2016wasgreaterthanallotherEuropeancountriescombined23.70

Ifsustained,thisrapidreductionarguablyputsBritainwellaheadofitsnear-termcarbonreduction71

trajectory, as it could nowbeat its carbon targets for 2018-22within the timeframeof the2013-72

2017 carbon budget24. However, as power sector emissions are part of the EU Emissions Trading73

Scheme (referred to as the traded sector), the net UK carbon accounting25 means that these74

reductionscanbe‘exported’fromthepowersectorasasurplustootherpartsofthetradedsector75

(e.g.heavyindustry)potentiallyinothercountriesinEurope.Underagreedcarbonaccountingrules,76

they cannot be allocated to, or purchased by the non-traded sectors in Britain (e.g. domestic77

transportorheat)toprovideadditionalcarbonheadroom26.Nevertheless,thesignificantreduction78

in electricity carbon intensity provides a direct benefit for decarbonising these sectors through79

electricvehiclesandheat.80

0

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Britain’scommitmenttoreducecoalpower81

DuringtherunuptoCOP21 inParis, theBritishgovernmentbeganconsultingonthephase-outof82

unabated coal by 202527,28, marking the world’s first commitment to abandoning coal power29.83

Although this deadline helps frame the Government’s commitment to decarbonisation, there is84

concern that early power station closures pose an unacceptable security of supply risk. From85

anotherperspective,itisfeltincreasinglyimportanttoremoveunabatedcoalassoonasispractical86

tofreeupitsmarketsharefornew,cleanergeneration30.87

SchedulingthedemiseofBritain’scoalgenerationhasbeeneasedbythefleet’sage(80%areover88

30yearsold),andtighteningairpollutioncontrolssuchastheIndustrialEmissionsDirective31.Halfof89

Britain’s coal capacity (14.3 GW) closed in the 5 years to 2017, and those that remain have90

historicallylowutilisation.Coalprovidedlessthan10%(28TWh)ofelectricalgenerationin2016;a91

smallercontributionthanwind(30.5TWh)and lessthansolargenerated inGermany(37.5TWh)3292

overthesameyear.93

Britain isthereforeontracktobecomethefirstmajoreconomytotransitionawayfromcoalafter94

centuriesofproductionand consumption (Figure3). The latter fell to12Mt in201633, levelsnot95

seensince193534.Therateofthischangeisunprecedented;ittook14yearsforpowersectorcoal96

demandtoincreasefrom12to28milliontonnesperannum(1936to1950),butonly1yeartomake97

the reverse transition (2015 to2016). Britain couldbe the first country to leave its coal reserves98

unburnt in the ground35, and in November 2017 it set out a global alliance to end coal power99

generation36.Thiswouldhavebeeninconceivabletopolicymakersevenagenerationago,whencoal,100

nuclearandoilgenerationpoweredthecountry16.101

102

Figure3:QuantityofcoalminedandconsumedforpowergenerationinBritain.Powersectordatafromref.17andcoal103productiondatafromrefs.33and34.104

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[BOX1starts]FactorsthatenabledBritain’srapidfuelswitch105

Britain’s experience of fuel switching can be viewed as a policy success, albeit at a rate thatwas106

betterthananticipated.Wesuggestfourfactorswerenecessarytoachievethisrapidfuelswitch:107

• Gasgenerationplantswerealreadybuiltandhadspareunderutilisedcapacity;108

• Existingfuelsupplyinfrastructurecouldcopewiththeincreasedpowersectorgasdemand;109

• Thepoliticalwillwasavailableto intervene inmarketsto incentivisetheswitch,penalising110

coalvs.gasgenerationviaaneffectivecarbonprice.111

• Coalandgaspricesweresufficientlyclosesothatswitchingdidnotinflictlargepriceriseson112

electricity consumers (a carbon price of £50/twas needed to incentivise fuel switching in113

2013,vs.£16/tin2016)12.114

RenewablegenerationhasalsorapidlyincreasedinBritain,loweringemissionsoverthelastdecade,115

butcontrastingFigure2andFigure5,significantreductionsonlyoccurredsincethe2013increasein116

carbonprices,duetofallingcoalemissions.117

Whileputtingapriceoncarbonenabledthefuelswitchin2015toberapid,thedevelopmentofthis118

policy and the enabling conditions and the investment in generation and infrastructure for the119

switchtotakeplaceweredecadesinthemaking.TheEULargeCombustionPlantDirective(2001)37120

and IndustrialEmissionsDirective (2010)31aided inclosinghalfofBritain’scoalcapacity;whilethe121

Climate Change Act (2008)38 and Electricity Market Reform (2013)39 laid the foundations for the122

CarbonPriceSupportscheme.123

[BOX1ends]124

Puttingapriceoncarbon125

Ourviewisthattheprimarydriverforcoal’ssubstitutionin2015–16wasthehigherpriceplacedon126

carbon emissions. Since 2005 British power stations were subject to the EU Emissions Trading127

Scheme (ETS) but it delivered carbon prices that were tooweak to drive sustained lower-carbon128

investment40–43. To address this, Britain introduced the Carbon Price Support (CPS) policy in 2013129

which required power-sector emitters to pay a top-up price to a Carbon Price Floor (CPF)130

determinedbypolicymakers44.Thisaimstoprovidegeneratorswiththecertaintyofamorestable131

(buthigher)priceofCO2thandeliveredbytheEU-widemarketalone.132

ThisCPSpolicyisstillsubjecttoregulatoryriskasthefloorpricecanbechanged.Itsinitialtrajectory133

wasrisingtowards£70/tCO2in2030;however,successiveannouncementshavefrozentheCPFatits134

2017 levelof£18/tCO2at leastuntil2021. While this suggestsdiminishedambition in the faceof135

6

cost sensitivities, it should be compared to an EU-ETS price of approximately €5/tCO2 throughout136

2016.137

Debate continues about the floor price45–47. Whilst it has been effective in promoting the switch138

from coal to existing natural gas generation, it has failed to incentivise construction of new low-139

carbon generation, which continue to require other forms of financial support. The cost to140

consumers can be approximated from the left panel of Figure 4 as the gap between the actual141

electricityprice,andtheestimatedcostofthemarginalfuel(whicheverismoreexpensive,gasand142

coal).Weestimatethecarbonpricefloorhasaddedintheregionof0.7p/kWhtoretailprices(~5%)143

during2016,whichiscomparablegovernmentanalysis48andestimatesforUKindustry49.Thisprice144

rise is verymodest considering the~25% reduction inpower sector emissions it facilitated in just145

oneyear.146

Figure4:ThewholesalepriceofelectricityinBritainwiththecompetitivebenchmarkbasedonfuelandcarbonprices.a147electricitypricesarecomparedwiththeestimatedcostofgenerationfromcoalandgaswithnocarbonprice.bshowsthe148comparison includingtheprevailingcarbonprice inBritain,alongwiththeshareoftotalelectricitygenerationfromcoal.149Electricitypricesare fromtheday-aheadspotmarket.Generationcostconsistsof fuelcombusted (dividedbyconversion150efficiency) and carbon emitted (multiplied by carbon price), neglecting other aspects such asmaintenance and network151charges. Pricesand costshavequarterly resolution, the coalgeneration sharehasannual resolution. Carbonpricedata152fromrefs.44and50,fuelpricedatafromref.51,electricitypriceandcoalsharedatafromref.12.153

ThecostsofelectricitygenerationareshowninFigure4,highlightingthefallingcostofgasrelative154

tocoalsince2014.However,coalwouldstillbethecheapestformofgenerationwiththeEuropean155

ETS carbon price, despite the sharp rise in international coal prices through 2016 (due to China156

cutting production by 10%)52. Instead, the CPF allowed gas generation to become equivalent or157

cheaper since the beginning 2016 and displace coal’s share of generation. In terms of historical158

precedence, the carbon price in Britain has been raised back to its level in 2008. In the rest of159

Europe,itremainsatjustone-thirdofitspeak.160

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Fuel switching is not unidirectional, and could equally be reversedwhile coal generation capacity161

remainsavailableoverthecomingyears,helpedbycapacitymarketpayments.Allthiswouldtakeis162

another shift in relative fuel prices or a weakening of the carbon price to increase coal’s annual163

marketshare.164

Leavingthemarketstoit165

Britain’s experience shows that liberalmarkets can rapidly adjust towell-timedwell-aimed policy166

signals.Policyisnotanessentialingredientthough,asAmericademonstratesthataconfluenceof167

market factors candrive fuel switchingalone, albeit at a slowerpace.53–55 Since2005natural gas168

priceshave fallen70%compared to25% for coaldue to increasedproductionand the inability to169

export shale gas5 (due to insufficient infrastructure). This has lowered the US average carbon170

intensityofelectricitybyaquarter(seeFigure1),witha7%swingfromcoaltogasoccurringin2015,171

reducingpowersectoremissionsbyaround133Mt56.172

ThepoliticallandscapechangedwiththeelectionofPresidentTrumpinNovember2016,suggesting173

ongoingtensionsbetweenFederaleffortstoreviveanailingcoalsector,andmanyStatepoliciesthat174

focus on decarbonisation. Carbon pricing at a federal levelwhichwould accelerate fuel switching175

from coal to natural gas is therefore improbable under the Trump administration. The US has a176

complex range of political drivers from federal environmental regulations impacted by sector177

lobbying, layeredwith further political drivers at state level.Within thismelange of political and178

market forces, it isdifficult to suggest future levelsof fuel switchingwithanydegreeof certainty.179

Federal regulationshave switchedbackand forth to favourdifferent technologies,which suggests180

thebenefitofhavinglegalmulti-decadaltargetstoaimfor.Britainisnotimmunefromlobbyingand181

switchingregulationsbackandforthtosuitdifferenttechnologies,but ithaspioneeredtheuseof182

long-term legal targets in the2008ClimateChangeAct38.Thishaskept the long-termambitionon183

track regardless of the change of policymakers and the political pressure to rescind policies that184

becomeunpopularwithcorevoters.185

PotentialforfuelswitchinginGermany186

Germany is regardedasachampionof renewableenergy for itsextensive investment inwindand187

solarpower.However,ithashadlimitedsuccessindecarbonisingitspowersector,withemissions188

down15%since1990,comparedtoBritain’sreductionof61%.Figure5showsthatGermany’slack189

ofprogressisduetocontinuedrelianceonligniteandhardcoalfor>40%ofelectricitysupply.190

8

Figure5:Power sector CO2 emissions inGermany andBritain, broken downby fuel source. The carbon price in each191countryisoverlaid,showingthemarkeddifferencesincetheintroductionoftheUK’sCarbonPriceFloorin2013.It isour192viewthatthiswasthemajoradditionalfactorthatcausedtherapidshiftfromcoaltonaturalgasgenerationafter2013.193datafromrefs.17and18,emissionsintensitiesfromrefs.32and12,andcarbonpricesfromrefs.44and50.194

Germany is self-sufficient for lignitebut imports 89%of its hard coal57, as its geologymakes local195

production internationally uncompetitive. Import dependency for natural gas is similarly 90%,196

althoughonlyone-sixthofdemand is fromthepowersectorasgas isprimarilyusedforheating18.197

Around 15bcm/year (~150 TWh/year) of spare capacity exists in the Nordstream pipeline for198

increased gas supplies58, with an additional 55bcm/year (540 TWh/year) if Nordstream 2 is199

constructed. At a national level, it seems the fuel supply infrastructure has the potential to200

accommodatesignificantlevelsoffuelswitching.201

However, several reasons temper Germany’s desire to take this route, not least the security202

implicationsofswappingindigenouslignitetoimportednaturalgas.Germany’sdecisiontoremove203

nucleargenerationprovidesanadditionalchallenge:installing60GWofwindandsolarpowerinthe204

last decade has done little more than offset the lost output from the 10 GW of retired nuclear205

power32. Both considerations were not applicable to Britain, which has no lignite mines, and in206

contrast to Germany, is embracing new nuclear build. Germany is a fascinating interaction of207

political economy interests, with a lignite lobby that capitalises on security of supply and cost208

argumentsforGermany’senergytransition.However,withoutthedevelopmentofCarbonCapture209

andStorageinGermany(whichcurrentlyseemshighlychallenging)atsomepointlignitegeneration210

will be impossible to reconcile with decarbonisation targets, and Britain’s experience shows this211

couldberapidlyreducedgivenGermany’spre-builtbutunderutilisedgasgenerationcapacity.212

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Germanyhas24GWof gas-firedpower stations, compared to28GWofhard coal and21GWof213

lignite32. In recent years, nearly-new gas power stations have been mothballed after proving214

unprofitable,andeventuallyexportedtotheMiddleEast59.Thisisbecausegascapacityliesmostly215

unused,with18%utilisationvs.40%forhardcoaland74%forlignitein201618. Anadditional155216

TWhofelectricitycouldbeproducedifthisgasgenerationcapacitywereutilisedat80%,sufficient217

tocompletelyeliminatehardcoalplusfour-tenthsofligniteproduction,whichwouldcutGermany’s218

powersectoremissionsbyaroundaquarter,or62MtCO2peryear.219

Greater emissions savings would result from displacing lignite. However, this would increase220

primaryenergyimportdependency;whereasswitchingfromhardcoaltonaturalgaswouldsimply221

switchonetypeofenergyimportsforanother,introducingadifferentsetofrisks.222

Potentialforfuelswitchingglobally223

Quantifying an accurate global potential for fuel switching requires a detailed country-by-country224

analysis of infrastructure, generation and demand, prices and policies. Nonetheless, the broad225

order-of-magnitudecanbeestimatedusingstatisticsforannualgenerationandinstalledgenerating226

capacity. We estimate the potential for fuel switching in the 30 largest coal consuming nations227

(covering 97% of global coal capacity) by compiling the amount of coal and lignite generation in228

2015, and comparing this to theadditional generation that could come fromgas in each country.229

This is based on existing, underutilised gas generation; disregarding the option of building new230

capacity.Themaximumgasgenerationpotentialassumesthatcombined-cyclegasturbines(CCGTs)231

couldrunupto80%utilisation(limitedbyavailabilityanddowntime),whileopen-cycle(OCGTs)and232

steamboilerstationswouldbelimitedto0–40%utilisation(duetoeconomicrationale).Displacing233

coalwithsingle-cycle(ratherthancombined-cycle)gasstationswouldyieldhalfthecarbonsavings234

due to their lower efficiency and thus higher carbon intensity. We assumeCO2 emissions of 405235

g/kWh forCCGTsand710g/kWh forOCGTs, relative to1025±55g/kWh fornational coal fleets14.236

Sources,detailsandjustificationaregivenassupplementaryinformation.237

Figure 6a shows the potential for fuel switching across the OECD and coal-reliant developing238

countries. Many European countries (including Britain) have over-built power systems with239

sufficient idlegascapacity tocompletelyeliminatecoal,at leastat theannualaggregate level. Of240

thelargestcoalconsumers,RussiaandtheUScouldconvert40–50%oftheircoalgenerationtogas,241

butChinaandIndiacouldonlydisplace6–12%duetothevastscaleoftheircoalfleets.242

Polanddependsonsolidfuelsforover90%ofitselectricity,andlacksthepre-existinggasplantsto243

takeovermarketshare60.JapanisstillgrippedbyacapacityshortageinthewakeoftheFukushima244

disasterandshutdownofitsnuclearfleet,thusitsgasstationsarerunningclosetocapacityalready.245

10

Figure6bshowsthatiffuelswitchingwasfullyrealisedinthese30countries,annualemissionscould246

fallby0.8–1.2GtCO2,around3%ofglobalemissions.ReductionsinChina,IndiaandEuropeamount247

to440MtCO2peryear,andareinsensitivetotheutilisationofsingle-cycleplantsasthesemakeup248

onlyafifthoftheirgasfleet.ThemitigationpotentialintheUSandRussiaismoresensitivetothe249

assumedutilisation,asOCGTsandsteamboilersformhalftheirgascapacity.250

Figure6:Estimationofthecarbonmitigationpotentialfromfuelswitchingin30countries.aComparisonofoutputfrom251coalpowerstationsin2015withthepotentialforadditionalgasgeneration,ifexistingcombined-cyclegasplantsoperated252at80%utilisationandsingle-cycleplantsat20%(withbarsshowing0%to40%). bTheannualgreenhouse-gasemission253savings if the identified potential for fuel switching was realised across these countries, showing the sensitivity to the254utilisationofsingle-cyclegasplants.Inpanela,countriesareidentifiedusingtheirtwo-letterISOcodes,anddiagonallines255highlighttheshareofcoalthatcouldbedisplacedbygas.Coloursareusedtogroupcountriesintothegeographicregions256listedinthelegendofpanelb.Thefourcountrieswithzeropotentialforadditionalgasoutputareshownbelowtheaxis.257Datafromsourceslistedinthesupplementaryinformation.258

NoSilverBullet259

While thisanalysis isonlya first-orderapproximation, it suggests that fuel switching in thepower260

sector could provide a significant boost to global decarbonisation. However, fuel switching is no261

silverbullet,andmanybarrierscanexplainwhyonlyasmallpercentageoftheestimatedpotential262

hasbeenrealisedthusfar.263

Fuel switching will change supply-chain and energy security risks, and in many countries would264

create political tensions by increasing import dependency for primary energy. Although265

employmentinthecoalsectorhasfallendramaticallyinmanywesterncountries,policieswhichare266

seentofurtherdecimatedomesticminingindustrieswill faceopposition,asseeninAmerica.Over267

the longer term, politiciansmust grapplewith the consequences of transitioning away from solid268

fuels; notably how to engage and retrain affectedmining communities where coal production is269

culturallysignificant,aswellasasourceofemployment.270

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Rest of WorldRussiaUSEuropeBritainIndiaChina

11

Therearealsoriskswithcarbon leakage inhighly interconnectedmarketssuchasGermany61,62. A271

strong carbonprice to promote fuel switching can reducewithin-country emissions, butmay also272

shift electricity production (and thus carbon emissions) to areas subject to a lower carbon price.273

Britainnowimportshigh-carbonelectricityfromtheNetherlands,wherecoalusageincreased40%274

and generators pay one-fifth the carbon price. Supranational harmonisation of carbon pricing is275

neededtoavoidthe'offshoring'ofpowersectoremissions.Otherconsiderations,suchasthelevel276

ofmethaneleakageinthenaturalgassupplychainmustalsobecarefullyassessed63,64.277

Carbonpricinghowever isnotablanketpolicythatwillworkeverywhere. Incountrieswhich lack278

thegasinfrastructuresuchasPolandorJapan,raisingacarbonpricewouldintheshorttermbeno279

less blunt than a blanket tax on electricity. In the longer term, a careful balance is needed to280

redirecthowexistinginfrastructurecouldbeusedwithoutgoingsofarastoincentivisebuildingnew281

gas infrastructureandavoidable carbon lock-in. Ifnomorecarbonemittingelectricitygeneration282

canbebuilt fora2°Ctemperaturerise toremain likely65, thedistinctionbetweenutilisingexisting283

gasgenerationversusinvestinginadditionalcapacityisofcriticalimportance66,67.284

Conclusions285

Switchingbetweenfossilfuelscanonlyeverbeatemporarysteppingstone.Itspotentialisbounded286

by the scale of existing coal and gas infrastructure, and natural gas is incompatible with deep287

decarbonisation68,69unlesscarboncaptureandstorageemergesfromits‘valleyofdeath’10.Ifspare288

capacity already exists, then fuel switching does not require several years towind up tomaterial289

emissions savings, unlike other key options (renewables, nuclear, efficiency improvements). The290

‘quickwin’isprovidedsimplybyusingpre-existinginfrastructuremoreeffectively.291

Britain’sexamplehighlightstheeffectivenessundercertainkeycircumstancesofplacingamodest,292

butstable,£18/tCO2oncarbon,andthespeedwithwhichthepowersectorgenerationchangedin293

responsetosuchasignal;itswitched15%ofitsgenerationmix(45TWh)inasingleyear,saving25294

MtCO2. Fuel switching can demonstrably achieve very rapid carbon reductions. In comparison295

renewables tooksixyears togrowfrom4%to19%ofBritain’sgeneration (a45TWh/yr increase),296

savingapproximately12 22MtCO2. Itwill be at least 10 yearsbeforenewnuclear capacitywill be297

builtinBritain59,whichwouldrequirethreeprojectsthesizeofHinkleyPointCtosave27MtCO2per298

year70tofuelswitchfromnaturalgas(ascoalwillnolongerbeonthesystem).299

Fuelswitchingcanalsobeacost-effectiveandconvenientformofdecarbonisation.Ifdrivensolely300

bymarketforcesitwilllowerbills;ifpolicysupportaltersthebalancebetweenclosely-pricedfuels,it301

canhaveminimal impactonconsumers,asseen inBritain. Naturalgas retains theenergysystem302

benefits of being a fuel: controllable and dispatchable generation, and extensive storage303

12

infrastructurewithdaystoweeksofcapacity,ratherthanminutestohoursforelectrochemicaland304

thermalstorage71,72. Controllableflexibilityis increasinglydesirabletoaccommodategreaterlevels305

of variable renewable energy generation, especially so if coal generation is simultaneously being306

retired.307

Anthropogeniccarbonemissionshadalmostplateaued73.Thenext,momentousstep,foremissions308

todecrease,couldbecatalysedbyaconcertedglobalefforttoswitchawayfromcoaltonaturalgas.309

Our initial examination suggests the top 30 coal consuming countries could prevent 1 GT of CO2310

emissionsfromenteringtheatmosphereannually;withacentralestimatethat20%oftheworld’s311

coalcouldbeswitchedtogasusingexisting,under-utilisedinfrastructure(therangeis13%withno312

OCGTupto27%withthemrunningat40%utilisation).Thisprovidesanimmediatebenefittoslow313

theincreaseincumulativecarbonemissions,buyingall-importanttimeforothersectorstocatchup,314

andprovidingcleanerelectricitywithwhichtodecarbonisethem.Anyefforttofront-loademissions315

reductionswilleasethepressureonfuturegenerationswhoarefacedwithremovingemissionsback316

out of the atmosphere74. However, it is vital to cumulative emissions that the gains of early317

decarbonisationfromfuelswitchingarenotsquanderedbytheextendeduseofgasgenerationasa318

substituteforthenecessaryincreaseinlow-carbontechnologies.319

The potential for rapid andmaterial global emissions reductions appears to have gone unnoticed320

thusfar;itisabouttimethatthebenefitsoffuelswitchingdeservedgreaterattention.321

Acknowledgements322

We thank the reviewers for their valuable feedback. This researchwas undertaken as part of the323

UKERC research programme EP/L024756/1, and IS was funded by the Engineering and Physical324

SciencesResearchCouncilthroughprojectEP/M001369/1.325

326

327

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