Coal-fired Power Stations

Debate between Andrew Percy and Nigel Adams

Wednesday 27th April 2016 Westminster Hall

[Nigel Adams]

That is a whole different debate. It is timely that we are discussing this issue today. Members may have seen the news earlier this week that Aberthaw power station, Wales’ largest coal-fired power station, will reduce its operating hours from 1 April next year. That is just the latest in a long line of announcements from power stations up and down the country that have decided either to downgrade their operations significantly or to close their gates completely. Such announcements inevitably have severe and wide-ranging consequences.

We often refer to the trilemma when discussing the pros and cons of UK energy policy, but the widespread closure of our coal-fired power stations presents its own trilemma. The first challenge is the clear impact the closures have on the communities in which the power stations are based. My hon. Friend the Member for Cannock Chase outlined that. She speaks passionately about the uncertainty facing her constituents who work at Rugeley and the distress that uncertainty inevitably causes locally and regionally.

Unfortunately, I have witnessed similar scenes in my constituency. Eggborough power station, which employs almost 300 people, was on the brink of closure earlier this year—it had announced a consultation on plans to close—until its new owner, the Czech group EPH, managed to secure a contract with the grid to provide extra capacity this winter. But it is just a year’s contract. It is a stay of execution; we cannot ignore the fact that a cloud still hangs over Eggborough’s future.

By contrast, Ferrybridge power station, which is right on the border of my constituency—I know it well—was not so lucky. It was forced to close earlier this year, to the detriment of the hundreds of workers based there. If that is added into the mix with the closure of Britain’s last deep coal mine at Kellingley colliery, which is also in my constituency and which closed last year, these are unquestionably very challenging times in my part of north Yorkshire.

As well as the socioeconomic impact of the closures, we need to consider the consequences for the nation’s energy security, which is the second element of the coal trilemma. At least 2.5 GW of coal closures have been announced in recent months, in addition to the 4.9 GW announced last year. That power would otherwise be supplied to millions of homes throughout the country. By losing those units, we are diminishing the resilience of our grid and its ability to absorb unforeseen risks.

Our margin of capacity, particularly when it is cold in winter, is already worryingly low. We are also significantly reducing the number of power stations that can provide ancillary services, such as system balancing, frequency response and black start, which allows us to turn the lights back on in the event of grid paralysis or partial shutdown. In the absence of coal-fired power stations, how will we procure such essential, often under-appreciated, services in future?

Because of the technical nature of this subject, I find there is a lack of understanding of the comparative capabilities of different types of power generation. Intermittent renewables, along with nuclear, are simply technologically incapable of delivering the services I have described. The lack of nuance in consideration is leading us blindly to risk our energy security.

The third element of the coal trilemma is cost. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom), has rightly said on many occasions that securing electricity at the least cost to consumers is an absolute priority. We totally buy into that—it is a commitment the Conservative party made in our general election manifesto and it is one we should keep.

If we are to pursue an orderly transition away from coal, as the Government intend, it is only right that we do so in the most affordable way possible. That is why it is so important that, when we consider which technologies to promote to fill the gap left by coal, we do so on a whole-system cost basis. Such an approach more accurately reflects the costs that intermittent generators pass on to the system because they are not available all the time.

I understand that during yesterday’s meeting of the Energy and Climate Change Committee my hon. Friend the Minister of State noted that the latest analysis her Department has commissioned on whole-system costs is currently being peer reviewed and is nearing completion. I congratulate my right hon. Friend the Secretary of State for Energy and Climate Change on pushing ahead with that and urge her to make the findings available as soon as is practically possible, so that they can inform the growing debate on this incredibly important issue.

We face three key challenges associated with coal coming off the grid: the socioeconomic impact, the security of supply impact, and the cost of filling the gap. On the face of it, it seems a particularly daunting task, but I am pleased to say that it is not insurmountable. Nowhere is that more vividly illustrated than at the Drax power station in my constituency—if you think you have cooling towers in your neck of the woods, Ms Ryan, there are certainly plenty more in my part of north Yorkshire.

Many Members present will be familiar with Drax. It is the largest power station in the UK and generates approximately 8% of all the UK’s electricity. Over recent years it has gone through an incredible transformation by converting and upgrading some of its generating units to use sustainably sourced compressed wood pellets instead of coal. In doing so, it has addressed the three core issues I mentioned earlier.

On socioeconomic impact, switching from coal to biomass has helped Drax to protect and secure the 850 employees who are based at the power station. It has also created new employment opportunities across the biomass supply chain, which has attracted hundreds of millions of pounds of private investment.

On security of supply, thanks to the conversion it has already undertaken, Drax has become the UK’s single largest source of renewable electricity. Around 12% of the UK’s renewable power came from Drax in 2014. Crucially, this power is not only renewable but flexible and dispatchable, like coal or gas. It is available as and when we need it and can be ramped up or down to respond to the requirements of the grid at a moment’s notice.

On costs, as I have stated often in Westminster Hall and many times in the main Chamber, on a whole-system costs basis biomass is the cheapest and most affordable renewable technology available to us today.

[Andrew Percy]

Will my hon. Friend give way?

[Nigel Adams]

I am happy to give way to my hon. Friend and neighbour, who also has the benefit of looking at the cooling towers at Drax.

[Andrew Percy]

I declare an interest: I live opposite the Drax power station and a small wind farm. People are taxed by the wind farm, which does not create any jobs, and very supportive of the power station, which does.

Does my hon. Friend agree that biomass makes sense, not only on a cost basis, but because the industry supports jobs in the UK in a way that some of the alternatives do not? He mentioned the many power station workers, but the whole supply chain goes all the way through our region, including to the ports, which have taken a big hit in the Humber because of the loss of coal imports. Support for biomass makes sense on so many different levels. We need Ministers to work cross-departmentally to get a proper assessment of the industry’s true value to the whole UK.

[Nigel Adams]

My hon. Friend is absolutely right. The regional impact on supply chain jobs is huge, not just for the ports, which are hugely important, but for rail as well. The wagons that Drax has commissioned to transport biomass—I had the great honour of launching them at the National Railway Museum—were built by a British company.

With respect to costs, we have to remember that it was the taxpayer who built these power stations right across the country under the Central Electricity Generating Board. We have already paid for these stations, so it makes absolute sense that we should—to use an unpopular phrase—sweat these assets as long as possible to ensure that we get the best possible value out of them for the taxpayer.

Reusing the existing infrastructure at a power station essentially eliminates the substantial grid connection costs and upgrade work that are associated with new builds, and that might have contributed to so few new stations being built. It also reflects the value that dispatchable power adds to the energy grid by balancing the system while the wind is not blowing and the sun is not shining—we all remember the problem with the grid last November.

Going from being western Europe’s largest coal-fired power station to being its biggest de-carbonisation project in less than three years has made Drax an incredible success story. The question is, then, how can we build on that success and, where possible, replicate it at other sites around the UK? It may be too late for Rugeley, but other stations could certainly benefit from conversion.

A sensible and practical solution would be to allow coal power stations to compete for Government support to convert to biomass in upcoming contract for difference auctions. The auctions could operate on a whole-system basis to allow the stations to compete on a level playing field against other renewable technologies. The biomass industry—I declare an interest as the chair of the all-party parliamentary group on biomass—is not looking for any special treatment; it just wants the opportunity to bid on a level playing field along with other technologies.

Alternatively, funding could simply be provided through the dedicated biomass pot that already exists to support biomass conversions. That pot does not currently allow bids from those who are looking to convert, only from new station builds, which are very costly. That does not seem to make a lot of sense when we already have the infrastructure with coal power stations.

I recognise that the Minister has previously indicated that £730 million has been committed to supporting less-established technologies in the CfD process through to 2020. However, research recently completed by NERA Economic Consulting and Imperial College London has shown that DECC could save consumers up to £2.2 billion by supporting biomass alongside offshore wind as part of a more cost-effective renewable energy mix.

In conclusion, I urge the Minister to work closely with his colleagues at DECC to consider how further biomass conversions could also be facilitated in the near future in the light of the significant benefits that I and my hon. Friends have outlined here today. Biomass is simply the quickest and most cost-effective way to get coal off the grid. As a nation we should look to promote its deployment further through additional station conversions while we still have a window of opportunity to do so.

Energy Bill [Lords]

Debate between Andrew Percy and Nigel Adams

Monday 18th January 2016 Commons Chamber

[Nigel Adams]

My right hon. Friend makes a perfectly sound point. That is the case today, for example. I will be more generous to the wind industry: I think that 1.11% of power today is being generated by wind. We all know what happened in November, but I will come on to that a little later. We are becoming more reliant on intermittent renewables.

[Andrew Percy (Brigg and Goole) (Con)]

I live opposite a wind farm in my hon. Friend’s constituency. I do not blame him for not preventing it, because it was before his time. Many of the people who are in favour of wind farms are not surrounded by them as people in my constituency are. On the issue of renewable energy and its intermittent nature, does he not agree that one form of generation that we should be promoting more and that we know very well in our area is biomass, which not only supports thousands of jobs at Drax power station, but is a source that we can turn on and off at will?

[Nigel Adams]

My hon. Friend and neighbour is absolutely right. I applaud the work that Drax power station has done and I look forward to biomass generation going ahead at Lynemouth, which is under new ownership. It is a much cleaner fuel than coal. Indeed, it reduces emissions by about 80%. I would like the Government to get behind more biomass. I am sure that they will have an explanation for why there might be three pots for offshore wind, but I would like biomass to be able to fight on an even keel with the other technologies.

There is increasing dependence on offshore wind and solar. The situation is getting worse, not better. The nuclear stations, when built, will form part of the solution, but they cannot react to changes in demand or failures in supply anything like fast enough to keep the lights on. They can provide only base-load power, which is important but is not the answer to the intermittency problem.

--- Later in debate ---

[Nigel Adams]

That is a fair point from my hon. Friend, but we certainly need bridging technologies, because we will have a gap in which we could see days like those we saw in early November.

[Andrew Percy]

Will my hon. Friend give way?

[Nigel Adams]

I feel as generous as Santa Claus today, Madam Deputy Speaker.

[Andrew Percy]

I thank my hon. Friend for giving way. First, although we are aware that coal is the dirtiest form of generation, it employs an awful lot of people in our area for one thing. Secondly, does he agree that the real concern is that losing Drax, Eggborough and Ferrybridge will put us in a position where the lights go off? Woe betide any Government who preside over the lights going off. We need certainty that losing coal will not lead to that.

[Nigel Adams]

I totally agree. That is another great advertisement for sustainable biomass. We have paid for these assets—the Central Electricity Generating Board built these power stations—so let us sweat them for more decades. Biomass is the answer in the short term. Who knows? There might be other technologies that we could be using at them, such as hydrogen power. I am sure that there are the brains out there to find a way to use that resource.

Flooding

Debate between Andrew Percy and Nigel Adams

Wednesday 6th January 2016 Commons Chamber

[Nigel Adams (Selby and Ainsty) (Con)]

The flooding between Christmas and new year could not have come at a worse time for many residents and businesses, as people were relaxing away from the pressures of work and several householders and business owners used the break to get away, leaving their properties unattended. They were therefore unable to defend their homes and possessions from the rainfall.

We are no strangers to flooding in Selby district. We had serious floods in 1947, 1981 and 2000 and on plenty of occasions between and since. On this occasion, I am relieved that the flood defences protected the town of Selby where, to my knowledge, not a single property was flooded. The historical village of Cawood was also spared, as its floodwalls kept the River Ouse at bay. Flood defences in Selby were not overtopped and I can only say that the way in which all the agencies responded was superb, ensuring that evacuation measures were in place should the worst happen. Residents who potentially would have to be evacuated were notified and rest centres were prepared. It is clear that plenty has been learned from previous flooding incidents.

Unfortunately, the town of Tadcaster and the villages of Ulleskelf, Kirkby Wharfe, Church Fenton, Newton Kyme, Acaster Selby and Bolton Percy were not so fortunate. In Tadcaster, 16 residential properties, 41 commercial premises and three public buildings, including the church, succumbed to flooding. Ulleskelf, where I used to live, saw 16 properties flooded, largely in the west end of the village. I thank all the volunteers there, led by Councillor Carl Clayton, whose efforts, early action and diligence without doubt prevented further homes from being flooded.

[Andrew Percy]

I am sorry to intervene, but I think that this is important. I congratulate my hon. Friend for what he did for his constituents. I got sick of seeing him on “Look North”—he did such a good job. Parish councils are important. In my village, when the warning came it was the volunteer emergency plan team in the village that swung into action. Do we not need to learn from that so that in future flooding incidents we encourage every village and parish to have an emergency plan in place? They can do much more than the county councillors can.

Finance Bill

Debate between Andrew Percy and Nigel Adams

Tuesday 8th September 2015 Commons Chamber

[Andrew Percy (Brigg and Goole) (Con)]

Eggborough power station employs a lot of my constituents, as it does my hon. Friend’s. Does he agree that the assessment undertaken by Ofgem is simply not robust enough and does not take account of that 4% figure? All it will take in 2016-17 is for the wind not to blow, for there to be a problem elsewhere on the plant or for the winter to be a little bit colder, and if Eggborough goes we will face blackouts. As I said on the radio recently, Governments that allow blackouts on their watch normally get their lights put out at the next election.

[Nigel Adams]

I could not agree more with my hon. Friend and neighbour. Whoever is in charge of ensuring that we have security of supply must ensure that they have robust numbers, and I am sure that my hon. Friend and I will be asking serious questions of them over the forthcoming weeks.

It saddens me greatly that this is not an isolated event. Many Members have communities that have been affected in some way by similar announcements in recent months: Longannet in Scotland, Didcot in Oxfordshire, and Ferrybridge, right next to my constituency in west Yorkshire. The Chancellor is rightly keen to create a northern powerhouse, and so am I, but I would rather see a northern powerhouse with some power in it. I do not want to see a no-power house.

There are no easy answers left on energy policy. I urge those hon. Members in opposition and in government who believe otherwise to think again, or to visit areas such as mine and talk to the constituents whose livelihoods are being put at risk. This is a commercially challenging time for the energy sector. Wholesale electricity prices are at the lowest level in years, in no small part due to the crash and the glut of oil in the global marketplace. That makes the investment case for any energy project, be it biomass, nuclear, gas or wind, incredibly challenging.

It is at times like these that our constituents and the energy industry look to Government for genuine leadership, and it saddens me greatly to say that on this issue the Government led by my party appear to have fallen short. “Investor confidence” is a phrase that is readily thrown around in debates like this and is perhaps too easily taken for granted, but when an esteemed member of the investment community such as Neil Woodford is quoted in a national newspaper in the days following the Government’s announcement on this issue as saying:

“If Government cannot be trusted to fulfil its long-term commitments then it will have to accept that it cannot rely on support from institutional investors”,

it would be irresponsible of me and other hon. Members not to heed his words.

It seems sensible to me that at a time when the energy sector is in such a sensitive and precarious place, policy decisions should be taken in the round rather than in isolation. The Government have already made public the saving they believe they would accrue as a result of removing the CCL exemption, but what about the consequences, intended or otherwise?

Drax Group, an energy company of which Members will be aware and that is based in my constituency, has invested hundreds of millions of pounds in recent years to become the largest renewable generator in the UK. It lost £425 million of its value on Budget day—£425 million in one day, a third of its total value. To me, it is incredible that a Conservative Government have effectively done that to a company that has done all that has been asked of it. The superb management team at that station has delivered Europe’s largest decarbonisation project. It is producing the lowest-cost renewable power available when we take into consideration full system costs, and it has done so while providing 8% of the UK’s power day in, day out. Furthermore, that is money that could otherwise have been invested back in the company further to fund its biomass operations or to support White Rose, one of the country’s two flagship carbon capture and storage projects. That is not an isolated case. I understand that many other renewables companies saw huge falls in their value on the back of the decision.

Discontinuing the CCL exemption would also eliminate the only financial incentive for businesses in the UK to use renewable energy instead of fossil fuels, and it has been in place for over a decade. Hon. Members will know that it is a rare occurrence indeed when I agree with Friends of the Earth, but its observation that the situation is comparable to imposing an alcohol tax on apple juice seems spot on. It appears to me to be a retrograde step, and one that will put small business owners, for whom I have the greatest respect, given my background before entering the House, in a position of uncertainty. Furthermore, as a Conservative it pains me to say that, far from being the removal of an unnecessary burden on business, the removal of the CCL exemption is the extension of a tax. Every business in the UK, whether large or small, must now pay the CCL; they can no longer avoid it by using renewable power.

I understand that one of the Government’s principal objectives in removing the CCL exemption is to prevent taxpayers’ money benefiting renewable generation abroad. However, the reality is that more than 70% of the income generated by levy exemption certificates went to UK-based energy producers. Furthermore, generators supplying renewable energy to the UK through interconnectors are currently exempt from a range of transmission charges that British generators are required to pay. Surely it would be better for the Government to look carefully at that loophole, rather than at measures, such as those proposed in the Bill, that will make the economics of generating in the UK less appealing.

As hon. Friends will know, I am not given to highlighting problems without suggesting solutions. I believe that all that Drax and the renewals industry are asking for is to be treated the same as other industries. When exemptions were removed from the combined heat and power industry, it was given two years’ notice. That contrasts with the 28 days’ notice given this time.

Job Insecurity

Debate between Andrew Percy and Nigel Adams

Wednesday 5th February 2014 Commons Chamber

[Nigel Adams (Selby and Ainsty) (Con)]

I know from personal and family experience that job insecurity, unemployment and long-term unemployment in particular are very damaging to individuals and communities. Unemployment can affect mental and physical health and hold back economic growth. I know what it is like for a family’s breadwinner to be made redundant. I know what it is like to start with nothing, but I also know what it is like to create a business, create jobs and create wealth and opportunities. It is right to help people into work and make sure that work pays. In return, people on out-of-work benefits, for example, should be encouraged to take the opportunities available to help them move off benefits and into work.

I am encouraged that the number of people on jobseeker’s allowance in my constituency has fallen by over a third since the last election. With an out-of-work rate of 2.2%, the situation is a lot rosier than it was in the depths of the financial crisis. Long-term unemployment and youth unemployment are also down by a quarter. However, I will highlight one area in my constituency where job insecurity is real. I make no apology for using most of my speech to talk about this issue.

I am proud to represent a constituency whose two power stations at Drax and Eggborough are responsible for about 12% of the UK’s electricity generation. I was delighted that, before Christmas, Drax was awarded an investment contract to convert one of its units to renewable biomass. This is great news for local jobs. Sadly, Eggborough power station, which recently celebrated 1 million running hours since its opening in 1967, was not so lucky.

Eggborough is a cornerstone of industry for the region, for both the 800 employees on site and the thousands of engineering, construction and procurement workers across the region whose jobs depend on Eggborough’s continuing survival. The station plans to convert from coal to biomass in a project worth £750 million for our region. A number of local MPs and I are deeply concerned that its future could now be at risk, and with that comes increased job insecurity.

[Andrew Percy (Brigg and Goole) (Con)]

This is a big issue in my constituency as well. My hon. Friend is fighting tirelessly for Eggborough. Is not the risk that if these jobs go, they will be replaced by energy generation that is largely constructed overseas? It will probably be offshore wind and most of those units will come from overseas.

[Nigel Adams]

My hon. Friend is right. He has been a great help in the campaign to ensure that Eggborough stays open. There is no sense in creating jobs overseas for technologies that do not produce electricity, when we have right on our doorstop technology that can work with our existing coal plant conversions.

Converting the station to biomass means 800 new on-site jobs and delivers growth right across the region. The majority of the work force, however, will be local to Selby. Of course, it is not just about new jobs for a new generation of workers; it is about preserving existing jobs on and off site. Many workers on site have given most of their professional lives to Eggborough and it is unthinkable that Eggborough should be forced out of business just as they are nearing retirement. I, the management of Eggborough and my colleagues will continue fighting for this project, because it is the right thing to do, not just for our energy security, but because of the hundreds of workers who are dependent on it for their livelihoods. Over the years the Selby area has lost its shipbuilding industry, and in 2004 the large Selby coalfield closed down, but thankfully we are seeing business confidence return and with that come jobs and opportunities.

The problem I have with the Opposition motion today is that it appears to have been drafted by someone who clearly has never been an employer. There seems to be a strategy to try to talk down the British economy at every opportunity for political advantage. Like several of my colleagues on the Government Benches, rather than talking a good game, I took the decision to try to take action in my constituency and organised jobs fairs, matching employers and jobseekers. I have also been into the jobcentre to help with mentoring and interview skills. The jobs fairs have been extremely successful in getting people back into work. We have now had three jobs fairs in the district and will shortly be organising the next one.

I want to take this opportunity to thank Jobcentre Plus for all its efforts in working with me and my team. I also thank Selby college and all the companies and organisations that brought their vacancies to the jobs fairs. I urge Opposition Members please to engage with the private sector in their constituencies and to do something positive, such as organising jobs fairs, because they really work. I regularly visit companies in my patch, and the news is extremely encouraging.

Jobs in this country are up. More than 30 million people are now working, which means more than 30 million individuals taking a pay packet home to their families. Vacancies are also up, which is extremely encouraging. They are now at their highest level for five years. A recent snapshot showed 569,000 unfilled job vacancies across the country. In addition, it is British people who are being hired, as in the past year 90% of new jobs went to UK nationals. The new jobs being created are overwhelmingly full-time, permanent jobs in the private sector.

We are by no means out of the woods, but the Government are delivering a sustainable recovery and making difficult long-term decisions to secure a better future for everyone. Lord help us if the anti-business, anti-aspiration party on the Opposition Benches is ever returned to government.

Biomass Power Generation

Debate between Andrew Percy and Nigel Adams

Wednesday 20th March 2013 Westminster Hall

[Nigel Adams]

Yes. The biomass that we use must come from sustainably managed forests, by which I mean forests where growth is at least equal to harvest. Nobody is saying that biomass is carbon-neutral; it is low-carbon. We must ensure a neutral, or ideally a positive, growth-drain ratio. The hon. Gentleman makes a particularly good point, to which I shall come later in my remarks.

[Andrew Percy (Brigg and Goole) (Con)]

I am a bit alarmed by the comments that seem to be against biomass. There is another issue of sustainability, of course—sustainability of jobs. It would be worse for our constituents if the conversion to biomass did not proceed, and those constituents of ours who work at dirty coal-burning power stations were suddenly thrown out on to the unemployment register. Sustainability is not just about what we burn; it is also about jobs.

[Nigel Adams]

I could not agree more with my hon. Friend and neighbour. We are fortunate in our neck of the woods; unemployment has fallen considerably in the past couple of years. Funnily enough, as it happens, I had a meeting yesterday with Shepherd Building Group, one of the main construction partners helping Drax convert its biomass plant, and Shepherd told me that more than 1,000 jobs are being generated or safeguarded by the project, and more than £700 million in investment is being made to realise it. We must bear that in mind. The hon. Member for Blackley and Broughton (Graham Stringer) makes a valid point, but we must remember that people’s livelihoods and jobs are on the line.

--- Later in debate ---

[Nigel Adams]

Drax and Eggborough power stations, if their plans are realised, will need 15 million tonnes of that material, the majority of which, it is fair to say, will come from abroad in a pelletised form. The UK simply does not have the forestry or the raw material. It is worth pointing out, however, that those are coal-fired power stations and that the vast majority of the coal—in fact, every bit of coal going into Eggborough—is imported.

Eggborough, as the Minister knows, is in the final stages of some detailed talks with the Department of Energy and Climate Change. The project is shovel-ready for full conversion of all four of its 500 MW units; the first unit could start generating exclusively from biomass in late 2014, if we get things right. Can the Minister reassure us that he will monitor and facilitate the progress of the second conversion project, which is important for my constituency and the UK, as it passes through the internal DECC processes? Over the next few years, as a result of the projects, the predominantly coal-fired stations will become predominantly sustainable biomass-fired stations, providing a significant contribution to the UK’s targets for renewable energy, protecting thousands of jobs, as mentioned by my hon. Friend the Member for Brigg and Goole (Andrew Percy), and enabling hundreds of millions of pounds of investment in the stations, as well as the enormous investment and job potential in the upgrading of our ports and railways to facilitate them.

Sustainable biomass is an essential part of our renewable energy mix: it is low cost, low carbon—if sustainably forested—and, importantly, it fuels reliable, predictable and dispatchable generation. Its availability is not exposed to the day-to-day vagaries of the Great British weather, so it can provide electricity when needed rather than when the weather permits. Also, unlike almost all other renewables, biomass does not require us all to pay for stand-by fossil fuel capacity for the times when the sun does not shine and the wind fails to blow.

By now Members will have gathered that I am immensely proud of and pleased with the progress we have made on biomass in Selby and Ainsty, which will soon be the renewable energy capital of Europe, as I am sure all will agree. We will have the potential for more than 4 GW of renewable generation in a five-mile radius, which is equivalent to some 8,000 of the large 2 MW onshore wind turbines or, put another way, to more than double the total realistic output of all the onshore wind turbines built in the UK by the start of this year.

I am, however, confused by some of the inaccuracies that tend to creep into the debate, often from those who should know better. To be clear, and as I mentioned earlier, biomass is not a zero-carbon technology but a low-carbon one. Emissions are associated with the harvesting and transport of biomass, and they must be extremely closely monitored. I fully support the Government’s efforts to ensure that mandatory sustainability standards are applied, as do Eggborough and Drax, which already insist on robust sustainability standards and criteria.

Most large-scale biomass generation in the UK will use wood, often by-products of other industries, such as forestry and sawmill residues together with non-commercial timber from thinning and forestry management operations. None of those sources cause land use change, which cannot be said of those used for biofuels such as palm oil; none of them results in lost opportunities for food production; and all of them generate substantial overall carbon savings.

[Andrew Percy]

Biofuels are important to the Humber, which has two bioethanol plants. May I encourage my hon. Friend to split biofuels into biodiesel and bioethanol, because the bioethanol production on the Humber is entirely sustainable and also provides an animal feed by-product? If he separates the two, we on the Humber will see that as helpful.

[Nigel Adams]

I hope that I have done so by making the point about the completely different product to be used to generate electricity at the power stations in my constituency.

The very process of managing a sustainable forest increases its ability to act as a carbon sink. Most of the biomass used for energy production in the UK will come from abroad, but it should and will come only from sustainably managed forests. In north America alone, the forest products industry harvests more than 500 million tonnes of timber per year, but demand for its products is declining. Unless the forests of the south-eastern USA get new production outlets, the health of those forests will decline.

We should note the scale of what we are discussing. I repeat: in north America alone, more than 500 million tonnes of wood is harvested every year. In only three selected regions of north America—the south-east, eastern Canada and British Columbia—it is conservatively estimated that a further 120 million tonnes could be sustainably harvested and utilised annually. Those figures put into some perspective the 30 million tonnes of wood that Drax and Eggborough need to produce the 15 million tonnes of pellets required.

In Canada, by providing a commercial use for the vast area of beetle-killed boreal forest—an area the size of England and growing year on year—we can help to turn what is currently a huge emitter of harmful greenhouse gases into a new carbon sink through clearance and Government-controlled replanting. Furthermore, the pelletising process enables us to ship the wood safely to the UK without any risk of importing disease, a subject that has been mentioned previously.

Some Members are aware of the so called carbon debt argument: because a tree burns in seconds but grows in years, there is somehow a carbon debt until a new tree has grown. The Department’s bioenergy strategy considered carbon debt in detail, however, and was explicit in its conclusion that, in situations where new forests are created, or existing forests have been under long-term management for production of timber and/or biomass, the harvesting of wood does not incur a carbon debt.

The biomass that Drax and Eggborough will use is to come from sustainably managed forests, which, as I said in response to an intervention, means that the growth must be at least equal to harvest, ensuring a neutral or ideally positive growth-drain ratio. In short, the sustainable management of trees in a productive forest means that they absorb more carbon than they would have done had the forest not been managed. In effect, such trees are building up a carbon credit as they grow. Can the Minister therefore reassure the House that the sustainability criteria for biomass, when the Government confirm them, will be based on the concept that a sustainably managed forest has a stable or increasing carbon stock, meaning that biomass from sustainable forest is at least carbon neutral?

Let me provide a few more basic facts about biomass generation. It is the only renewable technology able to supply base load renewable power at any scale. It is flexible and stable, and it has a continued role in balancing the grid with low-carbon generation. It is an essential part of the low-carbon energy mix and one of the only deliverable and affordable alternatives to the second dash for gas in which we might have to engage. Excluding biomass from the energy mix would significantly increase the cost of decarbonising our energy system. The Department estimates that sustainably sourced bioenergy could contribute around 11% to the UK’s total primary energy demand by 2020 and significantly more by 2050. Even taking into account the energy used to grow, transport and process the fuel, biomass-generated electricity produces substantially fewer emissions than are produced when fossil fuels are used.

Closer to home, I am mindful of the need to respect the effect of using biomass as a renewable fuel on other UK industries. The wood panel industry in particular is concerned about the impact on the historically low wood prices it has benefited from recently, but it should not have to worry because the wood that my power stations will use will come overwhelmingly, if not entirely, from markets in which it does not operate. The biomass industry relies on wood that no one else has a use for, certainly on that scale. It cannot pay the prices that the wood panel, paper, construction and furniture industries can pay, so instead of representing a threat to those industries, it provides a market for much of their previously unusable by-products that would previously have been burnt or put in landfill where they would degrade and emit carbon dioxide or, even worse, methane.

What about the benefits of biomass not just for electricity generation, but for the economics of the country as a whole? I am of the opinion that the biomass industry could generate infrastructure spending over the next three to four years alone of significantly more than £1.5 billion, leaving a lasting legacy of improvements to our ports and rail infrastructure while supporting thousands of jobs in the supply chain throughout the UK. That investment is needed now and should form part of the Government’s growth strategy.

I will come to a conclusion so that the debate can be opened to other hon. Members who have dragged themselves away from the Budget debate. I have stressed, perhaps overly, the conversion of my constituency’s two large coal-fired power stations to burn biomass, but that is just the first chapter, not the whole story, of the future of biomass. The conversion of existing fossil fuel plants is a speedy, low-cost first step in the transition from the use of carbon-intensive fuels to a greener alternative. It is an important part of what I see as a continuum in the use of biomass as a fuel source, which will also see new build, higher-efficiency power stations fuelled by a robust and sustainable fuel supply chain. Converting our coal-fired stations will not only see the country through an important transitional period, but will create a bridge to keep the lights on at the lowest possible cost. I suggest to hon. Members here today that on the grounds of electricity supply security, benefits to the economy and, most of all, emissions, sustainable biomass has a growing and valuable role and is a vital energy source for all our futures.

Coal-burning Power Stations

Debate between Andrew Percy and Nigel Adams

Wednesday 13th October 2010 Westminster Hall

[Nigel Adams (Selby and Ainsty) (Con)]

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.

[Andrew Percy (Brigg and Goole) (Con)]

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?

[Nigel Adams]

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.