I am grateful, Mr Bayley, for having the chance to speak on the future of coal-burning power stations. This debate follows one on wind turbines, in which we heard about some of the problems caused by such turbines that have been constructed in constituencies throughout the United Kingdom.
I regret that the 13 years of the previous Administration were largely wasted when it comes to pursuing green technology. There was a great deal of hot air, and the former Deputy Prime Minister made many promises that Great Britain would lead the world in such matters. However, we are regrettably behind the curve. That is surprising, because we have some of the greatest institutions in the world, including Oxford and Cambridge, and many engineers and scientists of world renown. We are blessed by that pedigree of innovation and pioneering technology, yet for some reason we are significantly behind other European Union countries on this issue. That is a matter of profound regret.
I hope that the Minister will take on board the fact that we need a co-ordinated Government approach to bringing those scientists together with energy suppliers and other specialists, so that we can work together with the private sector to ensure that future energy generation requirements are provided in the most cost-effective and efficient way. We should not flinch from learning from the experiences of other countries.
As was mentioned in the previous debate, wind will play a part and so will natural gas and solar energy, but I wish to talk about existing coal-burning power stations. What are the Minister’s policies on helping those power stations to convert to clean coal technology or biomass? He will know that European Union directives say that if they are not converted they will be forced to shut. What is his Department doing to help those power stations to convert?
The reason why I feel so passionate about the matter is that we have a major coal-burning power station in my constituency of Shrewsbury and Atcham. The Ironbridge power station is capable of generating 1,000 MWe. It is located in the Severn gorge, only half a mile upstream from Ironbridge, which is a world heritage site. It produces enough power to supply 750,000 homes. I am proud of the fact that we have such an important facility in my constituency.
The station’s two 500 MWe units can each produce 12 times more power than Concorde’s jet engines. The low-pressure blades are nearly 1 metre long, and with the turbine turning at a fixed speed of 3,000 rpm, the speed of the tips of the last row of blades is approximately 2,000 kph—twice the speed of sound. I give those statistics because we should be proud of the technology in Shropshire. It would be a travesty—a calamity—if that power station was forced to close as a result of EU directives.
I was on the telephone earlier today to Mr Bryson, the manager of the power station, which is operated by E.ON. He informed me that the station has 200 employees. As the local Member of Parliament, I am primarily concerned with those people’s jobs. I hope that everything can be done to support the continued production of electricity at that plant. I have toured the plant on several occasions, and I have seen that it uses crushed nut shells from Africa; that accounts for about 4% or 5% of what is burned there, although it is obviously nowhere near enough to comply with the European Union directive.
I invite the Minister to visit the Ironbridge power station. When he next travels to our part of the west midlands, I shall treat him to a lovely lunch in Shrewsbury. I would like him to see the power station at first hand, and the tremendous economic benefits that it gives not only to Shropshire but to the whole of the west midlands.
I am pleased to hear my hon. Friend talk so positively about the coal industry. I hope that he recognises that, globally, there is more than 200 years of coal provision to meet the energy needs of the world. I am glad to hear him talk about clean-coal technology. Does he recognise that there is an opportunity for business in this country to develop clean-coal technology and export it to the world, thus creating a brand new industry and allowing us to lead the world?
Yes, but I am primarily focused on biomass at the moment. Of course clean-coal technology will be an option, and I very much hope that the Minister will respond to that point.
In summary, we can see that the future of coal for UK generators relies heavily on carbon capture and sequestration technology. What has been clear for some time is that CCS is some years away from being economically tangible, and it will take either substantial subsidies or technological breakthrough to make it viable. There are certain difficulties with coal, but I accept, and I hope that the Minister accepts, that that is a possibility. What I hope the Minister will tell us today is what his Department thinks about the prospect of importing biomass for existing power stations, so that they can continue to generate electricity. Moreover, will he tell us what support can be given to them so that they can convert the technology to take in the biomass? Biomass needs full support at this stage from a regulatory and fiscal standpoint, and I very much hope that the Minister’s Department will work with E.ON to ensure the survival of Ironbridge power station.
As I said, I have spoken with Mr Bryson, the manager of the Ironbridge power station. This afternoon, he replied to me, saying:
“As you rightly say biomass is one of the options for the…coal plant and we’ve welcomed the DECC consultation on potential support under the Renewables Obligation for converting existing fossil plants to dedicated biomass. We support this in principle and look forward to the conclusion of the consultation. You might find it helpful to ask the Minister about the progress of the consultation and the impact on closing coal capacity in the UK.”
I should like to speak for longer, but I am conscious that my hon. Friend the Member for Selby and Ainsty (Nigel Adams), who has the important Drax power station in his constituency, wants to speak. I will therefore conclude my remarks by saying that senior citizens form one of the largest groups of electors in my constituency, and an important forum for senior citizens has more than 7,000 members, which makes it the biggest organisation in the whole of Shropshire. Time and time again, I get representations from senior citizens about their concerns over heating bills and how their pensions do not keep up with the rising costs of energy. I hope that the Minister will assure me that everything possible is being done to ensure that energy and electricity production in this country will be maintained, improved and increased so that senior citizens, businesses and others will not suffer from vastly inflated electricity and energy prices.
I thank my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) for securing this important debate and for allowing me a few minutes to voice my support for the future of coal-burning power stations. The future of such stations is clearly important to me, because my constituency is home to two very large coal-fired power stations at Eggborough and Drax; I also have Ferrybridge on the border of my constituency. Drax is one of the biggest employers in the area and is the largest, cleanest and most efficient coal-fired power station in the country. With a 4,000 MW capacity, it meets the electricity needs of around 7% of the UK, making it a very significant power station.
Coal was responsible for about 44% of electricity supply during the cold spells last winter. Its ability to respond quickly to demand makes coal-fired generation a vital contributor to security of electricity supply. High availability and reliability are among its two most notable qualities.
The UK’s current dependence on gas is potentially dangerous. Gas consumption is marred by price volatility and threats to supply from overseas, with more than 80% expected to be imported by 2015. It is clear that the elimination of a significant amount of coal-fired capacity from 2015 onwards could present a real supply security problem for the UK. As it stands, supplies of coal are four times more abundant than gas, with 200 years of supply, 40% of which comes from OECD member countries.
As my hon. Friend is no doubt aware, Drax has a huge impact on my constituency, too. It is all I see from my front window. However, does he not agree that although we are strong supporters of coal-fired power stations, there is a real potential in the Yorkshire and the Humber region, with its depleted oilfields, for us to pursue clean-coal and carbon capture technologies, which could bring more jobs to our region?
That is a fortuitous question, because I am just about to talk about CCS. I believe that the coal-fired generation sector has a crucial role to play in maintaining secure and reliable electricity supplies, but that the long-term survival of fossil fuel in the energy mix can be secured only if it is fitted with carbon capture and storage. The Yorkshire and the Humber region is ideally suited for a cluster-type approach to CCS, and a regional pipework infrastructure to transport captured CO2 from all the major industrial sites in the region to the North sea could cut the UK’s entire CO2 emissions by 10%.
Like any other sector, to remain viable and relevant, the coal-fired sector needs to be adaptable to change and the introduction of new ideas and technologies. There is a vital role to be played by the coal-fired generation sector in the transition towards a low-carbon economy, most notably through the introduction of biomass co-firing. I have seen such a shift in focus towards a low-carbon economy in action: Drax has committed itself to full conversion of one of its coal-fired generating units from coal to biomass. That is innovative but very costly, and it would not have happened if the single biggest challenge facing the coal-fired generation sector was not reducing its impact on the environment.
Biomass introduction and CCS can be effective ways of achieving a low-carbon economy—that is evidenced by moves within the sector to find greener methods of production. It is important that larger sites feel confident enough in Government support to take new steps in finding alternative methods of power production, because where large sites lead, smaller but equally important sites will follow. I conclude by saying how important a stable and predictable long-term energy policy framework is for the power sector to encourage large scale investments and to instil confidence among coal-fired generators to encourage them to make the significant investments necessary successfully to address the environmental challenge.
It is a continuing pleasure to serve under your chairmanship this afternoon, Mr Bayley, in the second of our two energy debates. It is a bit like a lotto double rollover, with many colleagues having the chance to speak about the wide range of energy issues that face us. A common theme runs through the debates, which is the need to decarbonise our electricity supply system, both in the roll-out of renewables and how we decarbonise the mass generation facilities that we have in this country.
Undoubtedly, coal is one of the most important elements within our energy supply system. In general, it produces about a quarter of our electricity. When I visited National Grid a couple of years ago, I found that more than half the electricity being generated was coming from coal plants. There is no doubting the significance of the contribution that coal makes to our energy security. Nevertheless, we must still recognise that coal is much the most polluting form of electricity generation. For example, a coal-fired plant produces about twice as much carbon dioxide per unit of output compared to a gas-fired power station.
Looking forward, I think that it is not a question of whether it is coal, gas, nuclear or renewables that we use; to ensure our energy security, we need to have some of all of those. But nuclear will take 10 years to build, coal with carbon capture is 10 years away as a commercially viable facility and some of the massive roll-out of marine technologies is also 10 years away. In the meantime, therefore, we will certainly need to have more gas in the system and that is why we are also taking urgent action to guarantee that we have the supplies necessary at a time when we are becoming more dependent on imports.
I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this debate and on his customary enthusiasm for everything that goes on in his constituency. In his excellent introduction he identified the key issue—the large combustion plant directive. That directive will require about one third of our coal plant to close down if it has not been fitted with flue gas desulphurisation, or FGD, facilities.
My hon. Friend the Member for Selby and Ainsty (Nigel Adams) will have seen at Drax the scale of the investment necessary for a FGD unit to be attached to a power station. Such a unit covers essentially the same ground area as the original coal-fired power station itself and it costs hundreds of millions of pounds to build. Consequently the companies involved have taken very careful decisions about whether the long-term potential of that plant justifies that investment. However, this is a matter for those companies and at the end of their deliberations they will decide whether they can give that type of plant a new life or whether they will simply have to allow it to use its remaining operating hours and close before 2016.
My hon. Friend refers to the large combustion plant directive. I believe that the capacity crunch will come in around 2017. Is he confident that Her Majesty’s Government will not need to seek a derogation from that directive in order to keep the lights on?
The evidence that we have is that the crunch, which had looked as if it was coming in around 2017, is now further out. The recession has reduced demand for power by 6% or 7% and demand has not come back up to the levels that it had been at before the recession. So, there is a crunch coming but it will now come towards the end of this decade.
However, that does not mean that we are off the hook, because following the LCPD is the industrial emissions directive, which will deal predominantly with emissions not related to CO2 . That directive will close down much of our remaining coal plant if the measures are not taken to ensure that our plant complies with it.
We have a mountain to climb and it is right that we should look at the range of options available to us, so that we can ensure that we have the generating capacity that will be so central in the future.
My hon. Friend the Member for Shrewsbury and Atcham also raised the issue of biomass. I am well aware of a company that is looking to convert the Ironbridge power station to a biomass facility. I am due to come to Shrewsbury in early December. It may be that I can meet representatives of the company then, or I can meet them in London if that is more convenient. I am very keen to learn more about their plans and to learn about how the use of biomass can provide continuity of output, production and employment at the Ironbridge facility.
We see biomass as having a very significant role to play in the energy sector. It can enhance our security of energy supply, because much of the biomass can come from our own indigenous resources. However, we know that sometimes the biomass comes from other parts of the world and we must be certain that the sources of biomass are indeed sustainable. Biomass is also dispatchable; in other words, it can reflect and respond to the peaks in demand. So, if there is a need for back-up capacity, a biomass plant can ensure that we have the continuing output that will be necessary, just as a coal plant can.
Without doubt, large scale dedicated biomass plants can deliver significant levels of renewable electricity by 2020. The renewable energy strategy, which was published by the previous Government in July 2009, estimated that electricity from biomass, including biogas and wastes, would comprise about 20% of all the renewable power generation that will be needed to meet the renewable energy targets that we as a country face.
We also recognise that electricity from dedicated biomass is cheaper than some other large-scale electricity sources. If the biomass generation needed to meet the renewable energy target were displaced by more expensive technologies, there would of course be an additional cost to consumers and, in all the discussion of these issues, that is a factor that we should rightly bear in mind, as my hon. Friend the Member for Shrewsbury and Atcham also reminded us.
Moreover, in comparison with some other large scale renewables, biomass can generate more long-term jobs relative to the megawatt-hours of energy output. That is due to the ongoing need for biomass feedstocks creating business and employment opportunities across the UK supply chain.
Use of biomass also provides an opportunity to enhance the forestry husbandry that we have in the UK. I believe that about 40% of our forests and woodlands are not under active management. So there is extraordinary potential and a massive national resource there, not only in terms of biodiversity but providing a renewable energy fuel that can make a major difference in this sector.
The Government support the generation of biomass electricity through renewable obligation certificates, or ROCs, which are tradeable certificates under the renewables obligation. In July, we announced that the support for dedicated biomass electricity plants under the ROCs would be “grandfathered”. That means that for 20 years the price that they would receive would be guaranteed, up to the 2037 end date of the obligation. I think that that will provide the certainty that investors are looking for.
However, we also recognise that we are receiving more inquiries from generators about the potential of switching to biomass and we acknowledge that we simply do not have enough understanding of the potential of that switch and what it can contribute. So we have called for evidence as part of our consultation on the ongoing work of the renewables obligation. That consultation will close on 19 October and we want everybody who has an interest in this issue to respond—I certainly hope that E.ON will contribute—so that we can understand the full range of interests and ensure that we can put a system in place that will encourage us to go forward.
My hon. Friend asks a very apposite question. Anyone who wishes to participate can access the consultation through the Department of Energy and Climate Change website. Alternatively, they can write to me, or to my hon. Friend himself and he can pass any correspondence on to me. They can even write directly to my officials. Whichever way they choose to participate, we will be pleased to have their input and I can give an absolute assurance that it will be taken into account.
My hon. Friend also raised the issue of carbon capture and storage, as did a number of other hon. Friends. I think that CCS is potentially one of the most exciting areas of energy development in the UK. It is an area in which we should be leading the world and in which we are absolutely determined that we will lead the world. CCS can reduce by 90% the CO2 emissions from a coal plant and we think that it is an area in which we must move forward faster.
In this country, we have the sequestration facilities in the North sea, with the depleted oil and gas fields; we have the skills of people who are used to working in the extremely dangerous and hazardous conditions of the North sea; and we have some of the best university expertise, at Edinburgh, Imperial college, Nottingham and elsewhere, which can be brought to bear to ensure that we take CCS forward. Therefore, we are looking at exactly what needs to be done to make CCS happen.
The coalition agreement was clear that we want to have four power stations—commercial power plants—equipped with CCS, as part of our vision of taking CCS forward. We want there to be a much more rapid development of CCS. [Interruption.]
Order. I regret to tell colleagues that there is a Division in the House, so I have to interrupt the Minister.
I ask all colleagues to get back to Westminster Hall as soon as they possibly can. We will start again as soon as the initiator of the debate, Daniel Kawczynski, and the Minister are back in their seats.
I thank my hon. Friend the Minister for giving way. I will be very brief.
Last week at the Conservative party conference, the Prime Minister, the Chancellor of the Exchequer and the Minister of State at the Cabinet Office, my right hon. Friend the Member for West Dorset (Mr Letwin), who is also the Minister with responsibility for Government policy, all mentioned CCS, which was very good news for anyone interested in this issue or, indeed, in climate change. Is the Minister personally confident that the coalition Government’s commitment on CCS will survive the spending review?
My hon. Friend tempts me to go into an area that is way above my pay grade and the Chancellor would be deeply annoyed if I set out the response to the spending review now. We have looked at these things very carefully indeed, we have a clear commitment to CCS and we believe that it has a massive contribution to make. We are rolling forward the development of projects 2 to 4, in addition to project 1. We think that that is part of the way forward. We are determined to make this technology work in the UK and I look forward to working with my hon. Friend to achieve that outcome.
Question put and agreed to.