The UK has closed the chapter on its 142-year history of coal-fired power, marking a symbolic and pivotal moment in the global shift towards cleaner energy.

As of 30 September 2024, the nation’s last coal power plant was decommissioned, making the UK the first G7 country to eliminate coal from its energy mix.

This move, occurring in the birthplace of the Industrial Revolution, not only signals the end of an era but also reinforces the global momentum towards renewable energy sources, positioning solar and wind at the forefront of the future.

The closure comes as the Organisation for Economic Co-operation and Development countries have collectively halved their coal generation since its peak in 2007, driven by the rise of solar and wind energy.

According to a report released on Monday by Ember, an energy think tank, “Coal generation in OECD countries has fallen by 52% since its peak in 2007. This dramatic decline has been largely attributed to renewable energy sources. Wind and solar were responsible for 87 per cent of the fall in coal during this period,” noted Dave Jones, Global Insights Programme Director at Ember.

According to the report, the UK is the 14th OECD country to achieve a coal-free power system, with the remaining OECD nations aiming for full phase-out by 2030.

Coal’s role in the UK energy mix has been shrinking for years. In 2012, coal made up 40 per cent of UK electricity generation, but by 2019, it was just 2 per cent, a figure that has now dropped to zero.

Jones highlighted the significance of this transition: “Once, coal power was a byword for industrial growth. Now clean energy is being used to drive industrial growth.”
The UK becomes the first G7 nation to exit coal-fired power, reports Sky News.

“The country has been burning coal to generate electricity since 1882, but the last remaining plant, in Nottinghamshire, is being decommissioned as capacity from clean alternatives has allowed it.

“The final coal-fired power station left in the UK will be shut down later on Monday amid the transition to renewable energy.

“The closure of the Uniper-owned Ratcliffe-on-Soar power station in Nottinghamshire will bring to an end a 142-year history of burning fossil fuel to produce electricity in the country,” the agency reported.

Global Shift

The decline of coal in OECD countries is mirrored by similar movements globally, as emerging economies also pivot towards renewable energy. However, some countries have yet to see rapid declines.

Ember’s report noted that “Türkiye was the only OECD country to set a new coal power record in 2023.”

Meanwhile, nations like Japan and South Korea have seen only modest reductions in coal reliance.

Despite these outliers, the overall trend is clear: as Ember reports, “Three-quarters of OECD countries are targeting a coal phase-out by 2030.”

Renewable Future

As coal exits the stage, renewable energy sources are taking over. “The rapid growth of wind and solar energy is not only replacing coal but also preparing to meet the increase in electricity demand,” said Jones, referencing the rise in electric vehicles and heat pumps across OECD countries.

The UK’s final coal plant closure symbolises a crucial turning point in the global shift to cleaner energy. With solar and wind powering the future, coal’s role as a dominant energy source is quickly coming to an end.

The Energy and Climate Intelligence Unit, in an X post on Monday, also confirmed this.

“End of an era as Britain’s last coal-fired power plant shuts down. The UK’s 142-year history of coal-fired electricity ends as turbines at Ratcliffe-on-Soar plant in
Nottinghamshire stop for good,” ECIU UK posted.

PUNCH Online reports that Ember is an energy think tank that aims to accelerate the clean energy transition with data and policy. Ember is the trading name of Sandbag Climate Campaign CIC, a Community Interest Company registered in England & Wales #06714443. ‘Ember’ and ‘Sandbag’ are trademarks held at the United Kingdom and European Union Intellectual Property Offices.

Renewable, Clean Energy

Meanwhile, the G7 (Group of Seven) is an intergovernmental organisation consisting of seven of the world’s largest advanced economies: the United States, Canada, the United Kingdom, Germany, France, Italy, and Japan. It meets annually to discuss global economic issues, international security, and policies related to trade, climate change, and other global challenges.

A renewable future refers to a shift towards energy systems powered primarily by renewable sources like solar, wind, and hydropower, instead of fossil fuels. It represents a sustainable path to reducing carbon emissions, combating climate change, and securing long-term energy independence for economies worldwide.

Likewise, clean energy refers to energy produced from sources that do not emit pollutants or greenhouse gases, such as solar, wind, hydro, and geothermal. It plays a crucial role in reducing environmental impact, promoting sustainability, and supporting global efforts to transition to a low-carbon economy.

The Director of the Abuja School of Social and Political Thoughts, Sam Amadi, has asserted that former President Olusegun Obasanjo had even more opportunities to fix the country’s challenges while he was in power but failed to do so.

Amadi asserted this while responding to a post on social media where a netizen [Gen_Buhar] alleged that Senator Rasheed Ladoja was illegally removed as Oyo State governor in 2006 for refusing to release N15 million out of the state’s monthly security vote to Lamidi Adedibu.

In a video clip he shared, Gen_Buhar captioned: “Jan 2006: Sen Ladoja was illegally removed for refusing to give N15m of the state’s N65m then monthly security vote to Adedibu.

“Obasanjo who now has solution to every problem Nigeria is facing was the President who gave Adedibu govt backing but because we are a people of very short memory, he’s being worshipped today.

“Obasanjo was also angry with him for standing against his failed 3rd term agenda.”

Responding, Amadi wrote on X: “Terrible. Obasanjo had opportunity more than any other person to change Nigeria. But he failed to achieve it because of personal moral failings.”

Watch the video clip below:

Credit to the government surged by over N11 trillion in the month of August 2024, as high interest rates make government securities more attractive to investors.

This is according to the latest money and credit stats data of the Central Bank of Nigeria (CBN).

The CBN data also shows that credit to the government accounts for 29.4% of N105.88 trillion net domestic credit in August as the government continues to rely more on local borrowing to fund its expenditures.

This was as the private sector experienced a slight decline in credit as debt repayment intensified, buttressing the impact of rising interest rates, which have made borrowing more expensive for businesses while driving greater interest in government securities.

What the data shows 

• In August 2024, credit to the government reached N31.15 trillion, a sharp increase from the N19.83 trillion recorded in July 2024.

• This marks a significant growth of N11.33 trillion or 57.1% in just one month. The surge in government borrowing reflects the increasing attractiveness of government securities, driven by higher yields resulting from persistent interest rate hikes by the CBN.

• By comparison, in August 2023, government borrowing stood at N22.51 trillion, meaning that in the space of one year, government credit has risen by 38.5%, affirming the growing reliance on debt to finance public expenditure.

Declining private sector debt 

• While the government is increasingly tapping into credit markets, the private sector appears to be retreating. Credit to the private sector in August 2024 stood at N74.73 trillion, a slight decrease from N75.51 trillion in July 2024. This marks a reduction of about N780 billion, or 1.03%. Though the decline is relatively modest, it reflects the broader trend of businesses struggling to cope with rising borrowing costs as the CBN continues its monetary tightening.

• In August 2023, private sector credit was significantly lower at N56.95 trillion, highlighting that while there has been an overall increase in private sector borrowing over the past year, the rising cost of debt is starting to weigh on businesses’ willingness to expand credit further.

The hike in Interest Rates 

The CBN, under Yemi Cardoso, increased the monetary policy rate (MPR) five times to combat inflation and foster economic stability.

The first hike increased the rate from 18.75% to 22.75%, the second to 24.75%, the third to 26.25%, the fourth to 26.75%, and most recently in September 2024, the Monetary Policy Committee (MPC) raised the rate by 50 basis points to 27.25%.

These increases, totalling 850 basis points since Cardoso’s appointment, have been driven by efforts to tackle the country’s persistent inflation challenges, which include high core and food inflation.

The CBN’s tightening monetary policy has reshaped the dynamics of credit allocation in Nigeria. Rising interest rates have made government securities more attractive to investors, as higher yields offer better returns with relatively lower risk compared to private sector lending. This has led to a surge in government borrowing, while businesses, facing higher borrowing costs, are more cautious.

However, there are concerns that prolonged tight monetary policy could stifle economic growth, especially if businesses are unable to access affordable credit to finance expansion and investment.

Also, although government securities have become more attractive due to higher yields resulting from persistent interest rate hikes by the CBN, the government is not exempt from the pressures of increased borrowing costs.

As interest rates continue to rise, the government will have to pay more to service its debt, particularly on new issuances of bonds and treasury bills. This could strain public finances further, as the cost of servicing debt could consume a larger portion of government revenue, leaving less room for critical expenditures such as infrastructure projects, social services, and other development initiatives.

What you should know 

The Bola Tinubu administration has relied mostly on the domestic debt market, especially treasury bills, to fund short-term obligations, a huge departure from the Muhammadu Buhari administration, which relied mostly on the CBN’s Ways and Means Advances.

Nairametrics earlier noted that Nigeria has a total Treasury Bills (T-Bills) debt of N10.4 trillion, a 60% rise in just three months, according to data from the Debt Management Office (DMO).

The CBN also incurred an estimated N1.55 trillion in interest payments for the 12 successful T-Bills auctions conduced in the first six months of 2024.

The interest costs in 2024 were approximately 654.7% higher than the N205.63 billion recorded the same period of the previous year.

Data from the apex bank reveals that the apex bank has sold Treasury Bills worth N8.4 trillion in the first half of the year for tenors ranging from 91-days, 182-days and 364-day bills. The stop rate, which is the interest rates accepted from the bids on offer, ranged from as low as 2.44% for some 91-day bills to as high as 21.49% for 364-day bills.

The Lagos Chamber of Commerce and Industry (LCCI) recently lamented the effect of high interest rate of CBN’s Treasury bill noting that it is drying up funds from the private sector into government’s treasuries.

The Director-General of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, called on the CBN to expedite the window of development finance for businesses to mitigate the effect of the high monetary policy rate in the country. He noted that businesses need the single-digit interest rate to drive the Nigerian economy.

Also, the President of the Dangote Group Industries Ltd, Alhaji Aliko Dangote stated that no economic growth will happen unless the bank interest rate at 30% decline. He further called for the protection of local industries, especially in manufacturing, across the country.

However, Yemi Cardoso, the Governor of the CBN earlier emphasized the necessity of maintaining higher interest rates to address the persistent inflation issues plaguing the Nigerian economy. Cardoso stated that tighter monetary policy accompanied by higher interest rates was at their disposal to solve the challenges of high inflation.

[Nairametrics]