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Electricity Generation

Volume 114: debated on Thursday 9 April 1987

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4.

asked the Secretary of State for Northern Ireland if he will make a statement on his policy towards the future of electricity generation in Northern Ireland.

8.

asked the Secretary of State for Northern Ireland whether he will make a statement on his policy towards plans to use lignite for the generation of electricity in Northern Ireland.

10.

asked the Secretary of State for Northern Ireland when he expects to give approval to the Northern Ireland Electricity Service for phase 2 of Kilroot power station.

The Parliamentary Under-Secretary of State for Northern Ireland
(Mr. Peter Viggers)

Electricity generation policy in Northern Ireland is aimed at reducing the Province's over-dependence on oil-fired generating capacity and at promoting efficiency within the electricity supply industry.

To this end a number of options for a new generating capacity required in the mid-1990s are being considered. These include a lignite-fired minemouth power station, for which proposals have been received from Northern Ireland Electricity and two private sector companies; phase 2 of Kilroot as either a coal-fired or dual coal/oil-fired facility; and interconnection with Scotland. No decisions can be taken until all these options have been fully evaluated.

I thank my hon. Friend for that reply. When will he be in a position to make an announcement, particularly about the lignite-fired power station, because the Antrim Power Company Limited has spent a good deal of money on its tender? It is an entirely privately backed consortium, supported by a number of medium-sized and large companies and private individuals. If the company obtains the contract, it will be a big boost for Northern Ireland, and particularly for inward investment.

I agree with my hon. Friend that the private generation of electricity might indeed be a considerable boost for Northern Ireland for several reasons—the possibility of cheaper electricity arising out of private sector efficiencies, the welcome boost to the construction industry and to the economy generally, and the impact that such a significant demonstration of confidence would have on Northern Ireland's industry. However, it is not possible at this point to put a timetable on the decisions, because they are extremely complex and involve a number of issues.

Is the Minister aware that all the unions involved in the electricity industry in Northern Ireland are bitterly opposed to any schemes that would lead to the establishment of a private generating capacity in Northern Ireland? They are particularly concerned that, because any contract that was then entered into with the Northern Ireland Electricity Service would be at a fixed price, it would eventually be terribly costly for the consumer. Is the Minister further aware that all the arguments that he advanced regarding generating stations could apply equally in the public as in the private sector? Does he realise that Opposition Members believe that the guinea pig scheme that is suggested for Northern Ireland would be introduced into the United Kingdom, since in the past the Government have used Northern Irelnd as an exploratory body for draconian anti-civil liberty measures that have then been introduced into this country?

We are well aware of the trade union representations. A number of representations have been made on the Electricity Supply (Amdt) (Northern Ireland) Order 1987 that has been sent out for consultation. My right hon. Friend the Secretary of State for Northern Ireland and I have agreed to meet union representatives. As to the hon. Gentleman's further points, I submit that there could be substantial advantages in private sector involvement in electricity generation in Northern Ireland. I have not had discussions with ministerial colleagues who are responsible for electricity generation in Great Britain. I am responsible only for Northern Ireland. Our absolute determination is to do the best for electricity consumers in Northern Ireland.

Will the Minister assure the House that, when a decision is made between the option of going ahead with the phase 2 of Kilroot—which is preferred by the Northern Ireland Electricity Service, which is responsible for the provision of electricity in Northern Ireland—and the option of private generation of electricity by means of a lignite power station—which is being promoted by the Bechtel corporation and the Hanson Trust — the fact that in 1986 £50,000 went from the Hanson Trust into the funds of the Conservative party will not influence the decision that is made?

It would be grossly improper to take a decision on such a basis, and I think it is most unfortunate that the hon. Gentleman should have made such an allegation. He is, of course, interested in the project on a long-term basis, and I am fully conscious of his interest in Kilroot station being developed, which would use coal. I assure the hon. Gentleman that we shall give the most careful consideration to that possibility.

Will the Minister confirm that equipment has been purchased for phase 2 of the Kilroot station? If he is looking for efficiency, as he said in answer to an earlier question, would it not be grossly inefficient if equipment that had already been bought was not able to be put to use?

Equipment has been purchased for the completion of phase 2 of the Kilroot power station, but the long-term interests of electricity consumers in Northern Ireland are best served by making sure that the contract as a whole over the life of the station — whichever station it may be that is developed — is the most advantageous and provides consumers with the cheapest and most secure form of electricity. The capital cost of developing Kilroot could be less significant in making the final decision than the fact that a cheaper source of fuel might be available, because fuel is more significant than the initial capital cost. However, no decision has been taken on the matter.

I hope that my hon. Friend will not take too much notice of what has been said by the hon. Member for Kingston upon Hull, North (Mr. McNamara). Surely the greatest interest is the interest of consumers in Northern Ireland, particularly industrial consumers, who for far too long have found that their energy costs, particularly at Harland and Wolff, in aircraft production and in a whole range of industries in Northern Ireland, are much too dear. If the private sector has a contribution to make to reducing energy costs, it should be given every opportunity to do so.

The private sector construction, and perhaps operation of such a station might provide economies. It is one of the factors that will be taken into account when we make our decision. Brown lignite, the fuel source, is indigenous to Northern Ireland and provides the possibility of a breakthrough for cheaper energy for Northern Ireland. Should that be possible, and should we decide to pursue that route, it might provide a substantial boost to the economy of Northern Ireland.

If the options are still to be considered and no decision has yet been taken, is it not premature and provocative to lay an enabling order to "introduce competition" into the industry? Does it surprise the Minister that that created great anxiety among employees and consumers?

I am grateful for the fact that the right hon. and learned Gentleman used the expression "enabling legislation", because indeed it is such, broadly replicating the terms of the Energy Act 1983 in Northern Ireland. This is enabling legislation. It does not commit the Government to a decision, because no decision has yet been taken. It is taking the Government some while to come to a conclusion because we are making the most industrious effort to ensure that we have all the facts available to us. We believe that we can reach certainty about the price of brown lignite on a long-term contract, the object being to have a fixed price or a price on a formula for the life of the station. What is less easy is to fix the price of coal on a long-term basis. That is also an important factor.