The evolution of the UK energy sector

A Changing Landscape in British Energy

Fifty years ago, the Trent Valley was a powerhouse of British energy, lined with the chimneys and cooling towers of 13 coal-fired power stations. Known as Megawatt Valley, this region supplied electricity to homes and industries across the country. Today, only one of those coal giants remains operational, and even that is transitioning to low-carbon hydrogen production. The UK energy system has undergone a dramatic transformation, moving away from coal towards cleaner, more innovative technologies.

Drax Power Station, once the pinnacle of coal-fired efficiency, has evolved with the times. Originally built in 1974 as the most advanced coal plant in the UK, Drax has successfully transitioned towards renewable biomass and is now pioneering bioenergy with carbon capture and storage (BECCS). This journey mirrors the broader shifts in the energy sector, driven by legislation, economic changes, and technological innovation.

The Coal-Dominated Era of the 1970s and 80s

The 1970s were marked by economic instability and energy insecurity. Strikes by coal miners led to widespread power cuts, forcing the government to implement a three-day workweek to conserve energy. Against this backdrop, Drax Power Station came online as the UK’s largest and most efficient coal plant, exemplifying the centralised energy system controlled by the Central Electricity Generating Board (CEGB).

At the time, coal provided nearly 80% of the UK’s electricity, with oil and nuclear making up the remainder. The UK’s reliance on domestic coal seemed secure until the oil crisis of 1973 exposed vulnerabilities in the energy system, reinforcing the importance of coal power. By the mid-1980s, Drax had doubled its capacity, cementing its role as a cornerstone of Britain’s electricity generation.

The 1990s: Market Liberalisation and the Rise of Gas

Privatisation in 1990 reshaped the UK’s energy landscape. The CEGB was dismantled, creating a competitive electricity market where private companies bid to supply power. This new model encouraged efficiency and innovation but also accelerated the decline of coal.

The discovery of North Sea gas and the introduction of combined cycle gas turbines (CCGTs) offered a cheaper, more flexible, and lower-carbon alternative to coal. By the late 1990s, gas-fired power had surged to 38% of the UK’s electricity generation, while coal’s dominance steadily eroded.

However, this transition came at a human cost. The decline of coal power led to the closure of mines and power stations, resulting in over 200,000 job losses in mining communities. This underscores the importance of ensuring a just transition as the energy sector continues to evolve.

The 2000s: Demand Peaks and the Green Shift

By the early 2000s, the UK’s electricity demand had reached its highest levels. Yet, despite population and economic growth, demand began to decline due to energy efficiency improvements, such as LED lighting and modern appliances.

Simultaneously, public awareness of climate change surged. The UK’s 2008 Climate Act set ambitious targets to cut emissions by 80% by 2050, introducing carbon pricing that made coal increasingly uncompetitive. Renewable energy started gaining traction, with the UK’s first offshore wind farm coming online in 2000. Meanwhile, Drax took a bold step towards sustainability, pioneering the co-firing of biomass alongside coal.

The 2010s to Today: Renewables Take the Lead

The past decade has seen the most rapid shift in Britain’s energy history. The carbon intensity of UK electricity plummeted by 58% between 2010 and 2020, thanks to government policies supporting wind, solar, and biomass.

Drax Power Station completed its transition from coal to biomass, significantly reducing its emissions. Wind power grew exponentially, overtaking gas as the UK’s primary energy source by 2024. Coal, once the backbone of the grid, now accounts for just 1.4% of electricity generation.

However, the rise of renewables presents new challenges. Balancing intermittent sources like wind and solar requires flexible energy solutions, including pumped storage hydro, battery technology, and BECCS. National Grid ESO’s Future Energy Scenarios report underscores the necessity of BECCS in achieving the UK’s Net Zero target.

The Road to Net Zero

As the UK aims for a fully decarbonised power system by 2050, the focus is on securing a stable, low-carbon energy supply. Technologies like BECCS will play a crucial role, not only providing reliable power but also actively removing CO2 from the atmosphere. Drax is at the forefront of this innovation, leveraging its expertise to support a secure, sustainable energy future.

The days of Megawatt Valley’s coal-fired dominance are over. In its place, wind farms, solar arrays, and advanced carbon capture technologies are shaping a cleaner, greener energy landscape. Yet, the fundamental mission remains unchanged: delivering reliable, affordable electricity to power the UK’s future.

Drax Group plc (LON:DRX), trading as Drax, is a power generation business. The principal downstream enterprises are based in the UK and include Drax Power Limited, which runs the biomass fuelled Drax power station, near Selby in North Yorkshire.

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