Coal-fired Power Stations

Mark Spencer Excerpts

Wednesday 29th June 2011 Westminster Hall

[Mr Mark Spencer (Sherwood) (Con)]

I am pleased to have secured this debate on what I consider one of the most important issues the country faces at the moment. It is also a pleasure to serve for the first time under your chairmanship, Mr Howarth.

I have a number of concerns that require a great deal of attention. Principally, our nation’s ability to ensure energy security is very important. Will we be able to keep the lights on in the future? Many customers and constituents are keen to ensure that the Government are focused on that question. How are we to keep the lights on, without becoming completely reliant on our European neighbours? Although we have a European market and many nearby nations are able to supply electricity, I am concerned about how secure that supply is, and how amiable their taxpayers will be about giving British people electricity when they may run short at the same time.

Throughout history, this nation has been served well by coal-fired power stations. Coal as an energy source to generate electricity is flexible, reliable and dependable. However, there are a number of pressures, such as the requirement to reduce our carbon footprint, that are calling that into question.

[Mr Marcus Jones (Nuneaton) (Con)]

I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on securing this important debate. Does he agree that it is not just an issue of energy security? There is also an issue in relation to facilities such as Daw Mill colliery in my constituency, where nearly 700 people work. In addition to issues around energy security, should we not be concerned to ensure that we still use the coal that is under our feet in Warwickshire, so that we are not exporting carbon emissions abroad and are supporting UK jobs?

[Mr Spencer]

I will come to that point later. I should put on record that some of my constituents in Nottinghamshire travel to Warwickshire to work at Daw Mill. That we have so much coal under our feet is pertinent, as is the fact that so many constituents rely on the coal industry for employment.

I will start by outlining the current usage and how we generate power. Coal produces more than 35% of the UK’s base load of electricity during an average year. In recent winters, when the weather has been cold, that base load lifted to 50% of the supply generated by coal. That emphasises not only how dependent we are on coal, but how flexible it is, responding to the requirements of the British public. On a cold Christmas day when everyone is trying to cook their turkey at the same time, we need a great deal of flexibility in the supply chain to be able to respond. I want to touch later on the fact that, unfortunately, the wind does not blow harder on Christmas day than on any other day of the year. We need that flexibility to respond to demand.

Fossil fuels as a whole account for 80% of our energy supply: coal being 25%, gas 21% and petroleum 34%. In addition, nuclear provides 6.5%; hydro 2.2%; and biomass waste 11%. Only 0.4% of global energy demand is met by geothermal, solar and wind. Estimates suggest that world demand for coal-fired generation will increase by 70% in the period up to 2030. China is currently constructing the equivalent of two 500 MW coal-fired power stations a week, a capacity comparable to the entire UK power grid each year. Those figures are quite pertinent and put in perspective where the UK fits into a global generation market. About a third of UK electricity is generated from coal but it currently emits more CO₂ per unit of electricity than all other forms of generation. That is something we need to address.

The UK has installed electricity capacity of 77 GW. By 2016, it is expected to face a shortfall of 32 GW, as older coal, nuclear and oil plant is closed down, as demand rises. That is crucial and key to the debate today. Government policy is currently to introduce a floor price for carbon. Many of the coal-fired generators recognise that that is going to put enormous pressure to be economic on their business. In the medium to short term, it will not be possible to secure nuclear power stations that deliver the energy that we require. Generators that produce power via coal are working their units very hard to secure as much return on their investment as possible. There will be a period when our ability to generate power will be short, and the Government need to look long and hard at how we will close that gap.

As my hon. Friend the Member for Nuneaton (Mr Jones) suggested, coal is currently plentiful. It is relatively cheap, flexible and able to respond quickly. We are not prone to outages, and coal is not vulnerable to geopolitical risk. Coal generates about 40% of the world’s electricity, with about 10% each for gas and nuclear. Coal burned by major electricity generators, which account for 80% of total coal use, was up 3% in 2005. Coal burned in UK power stations was 23% higher in the third quarter of 2006 than in the same period in 2005. Coal demand is rising. That demonstrates not only how reliant on coal we are in this country, but the pertinent fact that use is increasing.

UK pits and mines are pretty efficient. We have heard about Daw Mill. Thoresby colliery in my constituency is very efficient in its coal production. I am delighted it has now had permission to explore another seam, which will secure the future of that colliery for at least the next 10 to 12 years.

Given current global energy consumption, it is estimated that there are enough recoverable coal reserves to provide the entire planet with all its energy for the next 600 years, at the current rate of usage. Britain is estimated to have 7 gigatonnes of coal left. In power stations performing carbon capture and storage, we could deliver a sustainable and reliable approach to energy production.

[Julian Sturdy (York Outer) (Con)]

I thank my hon. Friend the Member for Sherwood (Mr Spencer) for securing the debate. He is right about the importance of energy security, especially over the next 10 to 15 years. Does he agree that we need a balanced energy market and security of supply, in which, as he says, coal will play a key role? He touched on carbon capture, which will be the key way potentially to keep many of our coal-fired power stations burning and supplying energy over the short term of 10 to 15 years.

[Mr Spencer]

I thank my hon. Friend for that intervention. That point is fundamental to the debate: coal is recognised as being flexible, but we need to embrace the technology of carbon capture and storage. That is something that I want to explore in more detail later. It is interesting that my hon. Friend touches on carbon capture and storage, because those are new clean technologies that have been proven to work. Powerfuel’s new development at Hatfield, Yorkshire, is backed by Friends of the Earth. It is a good example of how new clean coal plant can be developed and can work in practice.

I turn to the environmental side of the argument. Despite legally binding targets to reduce greenhouse gas emissions, in 2008 91.5% of UK energy supply was met by the use of carbon-intensive fossil fuels. We need to address that figure seriously if we are to, first, meet our energy demands and, secondly, reduce this nation’s carbon footprint.

EDF Energy has said that, between now and 2016, 13 GW of coal and oil baseload plant will close. Other ageing coal plants may also close by 2016 and 7.5 GW worth of nuclear closures are scheduled by 2015. EDF Energy reached its figure of a 32 GW shortfall by factoring in the expected closures, the expected growth in demand for electricity and the expected growth in line with the renewables obligation. That figure of a 32 GW shortfall will be a terrifying one unless we find ways of plugging the gap that do not necessarily involve laying cables across the channel so that we become dependent on our near neighbours.

If the UK coal-fired power stations were replaced over time with clean coal plants, the UK would stand at the head of an energy revolution, we would be secure in our energy supply and we would also be comfortably within the environmental emissions targets. I hope that the Government can find a way to support investment in clean coal technology so that we can achieve some of those goals.

Carbon dioxide capture and storage—CCS—is the critical enabling technology that would reduce CO₂ emissions significantly while also allowing coal to meet the world’s pressing energy needs. It is important to recognise that this is a global issue. While we are considering UK energy generation, it would be foolish not to observe what is happening on the rest of planet Earth. I have already mentioned China and the number of power plants that it is producing. If we can find, develop and enhance CCS technology, we could position ourselves well in the world.

[Mr David Hamilton (Midlothian) (Lab)]

I congratulate the hon. Gentleman on raising this very important issue. Given the timetable before us—the site contract is to be signed by Scottish Power by 2011, but we will not see any real production until later—is he as concerned as I am that there will be a gap in the energy market and we will not be able to fulfil the energy requirements of this country? How will we overcome that problem if we do not move the energy agenda forward?

[Mr Spencer]

I thank the hon. Gentleman for that intervention and that is exactly the point—there is this gap and we must find a way to fill it. A Government of whatever colour have to address this issue quickly and grab it with both hands, because we cannot afford to be in a position where that gap increases and we cannot keep the power on. I therefore commit myself to supporting him in lobbying Government to ensure that we fill that gap. I hope that the Minister will reassure us at some point that we can fill it.

CCS is a means of mitigating the contribution of fossil fuel emissions to global warming. The process is based on capturing CO₂ from large point sources, for example power stations, and storing it in such a way that it does not enter the atmosphere. CCS can also be used to describe the “scrubbing” of CO₂ from ambient air as a geo-engineering technique. Although CO₂ has been injected into geological formations for various purposes, the long-term storage of CO₂ is a relatively new concept. The first commercial example of its use was at Weyburn in 2000.

I want to explore the three groups into which CCS can be split: post-combustion; pre-combustion; and oxyfuel.

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

I congratulate my hon. Friend on securing this debate, not least because I live opposite Drax power station, which is the most efficient, cleanest and biggest coal-fired power station in the country. Is he aware of the consultation that is going on in my own village of Airmyn today, between 2pm and 7pm, which relates to the National Grid’s proposal for a CCS pipeline that would serve the steelworks at Scunthorpe as well as the power stations across north-west and south Yorkshire? As I say, that consultation is going on at the moment. That pipeline is an exciting prospect and it offers the possibility of extending the life of some of our power stations.

[Mr Spencer]

I thank my hon. Friend for that intervention. In fact, I have the Drax report here in front of me and I know that he is working very actively to ensure that his constituents are well represented in that consultation. Drax is a very good example of what can be achieved. The work that it has done in blending biomass with coal to improve its carbon footprint is an example of how we can improve things with the technology that exists today. Also, working with other industries, such as the steel industry, is quite an exciting prospect and I welcome that happening; in fact, I recognise that that good work is ongoing.

Flue gas desulphurisation is not a new technology. It has been used for some time. Ratcliffe-on-Soar, the largest power station near my own constituency, has introduced a great deal of new technology to capture the sulphur emitted from the power unit. FGD is simple, actually. It basically works by mixing limestone with water, which is then sprayed into the power station chimneys through which the flue gases pass after the coal is burned. The sulphur in the flue gas reacts chemically with the injected spray and forms calcium sulphate, with only a small proportion of the sulphur being ejected into the atmosphere. The resultant slurry is then pumped away, dried and made into gypsum, which is beneficial to the power station and can be used to generate income for it. FGD equipment also allows coal-fired plants to meet the requirements of the EU large combustion plant directive.

The second group of CCS technologies is integrated gasification combined cycle, which is a pre-combustion technology. IGCC is a near-zero-emissions clean coal solution for the UK. It would significantly reduce CO₂ emissions as well as providing pressurised gas for injection into North sea oilfields, thereby enhancing the recovery of oil reserves, which is known as enhanced oil recovery. Powerfuel is now constructing one of Britain’s first IGCC clean coal power stations in Yorkshire, again using British coal from an adjacent colliery. I will try to put the process into simple language. It sometimes becomes very difficult to extract crude oil from wells and there is a technique whereby the CO₂ can be mixed to reduce the viscosity of the oil, allowing the oil to be removed from the wells more easily.

Super-critical power plant is a type of clean coal technology whereby it is possible to retrofit this technology to the power stations that we already have. The benefits of operating a super-critical power plant over a conventional plant are clear. Conventional boilers have an operating efficiency of about 30%, which means only 30% of the energy in the coal is converted into electricity with the rest being lost as heat. Super-critical boilers have efficiency levels of around 42% to 46%, so more energy is directed to turning the turbines to generate electricity and therefore less greenhouse gas is produced per kilowatt-hour. Improving the efficiency of boilers used in coal-fired power stations not only reduces CO₂ emissions, because less coal is needed to generate the heat energy that turns the steam turbines, but it results in higher generator efficiencies in the provision of the electricity. The boilers are available commercially and can be retrofitted to existing coal-fired plants, which means no major retraining of staff, faster deployment and reduced capital costs with greater efficiency. It seems like a win-win situation to me.

Doosan Babcock Energy has stated that Britain could cut the cost of reducing greenhouse gases by £3 billion if it fitted such clean technology to its ageing power stations. Lobbying goes on for Government to introduce a form of incentive for power generators—one similar to the renewables obligation certificates—to invest in clean coal technology. Creating such an incentive seems the right thing to do and I hope that this debate will assist the Government in some of their thinking, and perhaps we can consider supporting this technology.

Doosan Babcock Energy says that applying this technology to existing coal-fired power stations would be the equivalent of erecting 7,000 to 10,000 wind turbines. Members in Westminster Hall today who have had the pleasure of a local application for a wind turbine will be relieved that we could reduce the number of those applications, one of which I currently have in my constituency. Typical construction costs for current coal-fired power station designs are in the region of £700,000 to £900,000 per megawatt. More advanced integrated gasification combined gas cycle plants cost between £900,000 and £1.3 million per megawatt, although lower capital costs of £750,000 to £900,000 per megawatt are predicted as technology moves forward and we become better at fitting it. The 2002 energy review by the performance and innovation unit put the costs of coal-fired power stations in the 3p to 3.5p per kilowatt-hour range by 2020. That would make coal competitive with nuclear power, if the costs of decommissioning nuclear power stations were included.

Briefly, I want to explore carbon abatement capture. The idea of carbon capture is simple and powerful. The CO₂ must be segregated from the fossil fuel combustion products and deposited in a place where it will remain. The CO₂ emissions from a clean coal plant will be reduced to virtually zero if the plant has been designed to store the carbon. The CO₂ can then be disposed of in, for example, the emptying fields of the North sea, where it can consequently extend the life of those oil fields by applying pressure to an old and difficult-to-extract reserve, thereby prolonging production. I shall try to put that into layman’s terms. The gas is pumped into the hole where the oil is coming from, which assists in removing some of the oil, and stores the CO₂ back underground, where the carbon was for millions of years. It is a three-step process, of capturing the CO₂ from the power plant, transporting it—as my hon. Friend the Member for Brigg and Goole (Andrew Percy) said—to another place via a pipeline, and finally storing or using it.

The British Geological Survey estimates that the potential carbon dioxide storage in the UK sector of the North sea is 775 gigatonnes. That is a considerable amount, given that worldwide CO₂ output is 8 gigatonnes annually, and it means that in the North sea alone there could be almost a century’s worth of CO₂ storage for the whole world. That is a fantastic statistic, which proves that we have the storage available as long as we can embrace it and find a way, via the technology, to make use of it.

Carbon capture and storage in a coal-fired plant would cost just over £20 per tonne of CO₂, while the figure for a gas-fired plant is about £30 a tonne. It could be argued that that is because a coal plant produces more, but coal is certainly cheaper per tonne than gas for CO₂ emitted. Using CO₂ for enhanced oil recovery can generate revenue that offsets the other costs of CCS. The cost of storing CO₂ in aquifers is close to £l per tonne, and the cost of storing it in oil and gas field plants ranges from £1 to £20 per tonne. Therefore, as well as being fairly reasonable, this method could generate income if we can get it right and make it work. Depleted oil and gas fields are the first sites to be considered for storage capacity because they are known to be equipped with infrastructure such as pipelines and platforms, and are almost ready to run now.

The other area that I really want to explore, and which I know my predecessor as MP for Sherwood, Paddy Tipping, and his predecessor Andy Stewart explored, is underground coal gasification. This is a method of converting unworked coal into a combustible gas, which can be used for industrial heating, power generation and the manufacture of hydrogen, synthetic gas or diesel fuel. The basic UCG process involves drilling two wells into the coal, one for the injection of oxidants and another—some distance away—for bringing the product gas to the surface. I acknowledge that the process involves a number of challenges, not least of which is whether once the process has been started it can be controlled, and there are also the impacts on subsidence above surface level, depending on what happens to the coal below ground. Nevertheless, we should consider using UCG for reserves under the sea. Cost estimates of UCG clean gas stand at £2.50 a gigajoule, whereas the current price of national gas is £6 a gigajoule.

As for the economic merits, clean coal is competitive, with an estimated generating cost of between 2p and 3.5p per kilowatt-hour. Wind power, for example, costs between 3.7p and 5.5p per kilowatt-hour. The Government seem fairly committed at this moment in time to wind power, but when the costs are added up and the subsidies stripped out it is not as competitive as some of the other available technology. Clean coal is also more acceptable to constituents than erecting large wind turbines in the vicinity of their homes.

[Graham Stringer (Blackley and Broughton) (Lab)]

I am listening carefully to the hon. Gentleman as he makes his powerful case for coal. Is he not overplaying, however, the role of wind power? He indicated earlier that, when wind is needed most, in the cold weather when there are anticyclones, it is not there, so we have to have the coal-fired capacity, and if the wind blows too much, we again have to have that capacity. Wind power is irrelevant to the security of energy supply in this country.

[Mr Spencer]

The hon. Gentleman is absolutely correct, and I will cite some statistics later that support his view. Offshore wind has a role to play in assisting electricity generation but we do require that base load. I do not want to overemphasise this, but when the World cup final half-time whistle goes or when everyone wants to cook their turkey on Christmas day, we have to have the capacity to lift that generation. However, the Government currently do not have the power to control the wind and can rely only on what is available.

[Andrew Percy]

I have issues with onshore wind, but I never miss an opportunity to sell the Humber for its offshore wind capacity, particularly in front of the Minister. Is it not a bit of a false argument that we are in favour of either one technology or the other? What my hon. Friend and the Government are saying is that we want a broad mix. A technology that is not as far advanced as perhaps it should be is tidal, to which I understand the Government have just committed some money. It is not about being on one side of the argument; it is about being on all sides and having a balanced energy mix.

[Mr Spencer]

It is true that we need to take a balanced view and ensure that we explore the new technologies. I think that tidal and wave power are great, and if they work they will contribute a small amount to this nation’s energy security. The important thing to note though is that it will be a small amount, because those technologies do not have a large enough share of the market. The number of areas where we could secure a tidal scheme—the Severn estuary is one example—is small, and there are no opportunities to generate enormous amounts of electricity via such schemes. I acknowledge that we need a mixed portfolio, but that works only if there is something there to pick up the base load. The crux of my argument is that the only methods that can be used to pick up the base load are nuclear power and coal-fired power stations, and we are not in a position to build nuclear power stations fast enough to plug the inevitable gap.

On the merits of clean coal technology for the environment, the biggest long-term problem for coal is its carbon dioxide level. Approximately 90% of the CO₂ produced by a coal-fired power station could be captured with CCS, and CCS could help to make up to 20% of the global cuts in emissions that are needed by 2050. Therefore, if we can find the technology that will work, we can sell it to the world, continue to use coal and at the same time cut the amount of CO₂ being released into the atmosphere.

Owing to their substantial carbon emissions, coal-fired power stations are currently considered environmentally unacceptable. That is simply because we are looking at the technology of the 1960s and 1970s, rather than at what is available now and might be available in future. Coal-fired power gets a bit of a poor press, but some of what is said about it is not true.

The UK has the opportunity to be at the forefront of developing clean coal technology. That would not only be beneficial to the UK, but be a very effective way of helping developing countries, notably China and India, to take advantage of their own coal reserves in a way that is considered environmentally acceptable. We find ourselves in a situation in which the Department for International Development is funding the World Bank, which in turn is funding electricity generation in other parts of the world, and those countries are spending that cash on coal-fired power stations, which are not as environmentally friendly as they could be. If we can find a way to make the technology work and embrace it, we could sell it to other parts of the world or donate it as part of our aid programme to the more challenged parts of the world, which would benefit the planet and those more challenged countries as well.

It is vital that we are at the forefront of development. That could lead to a whole new industry. Selling the technology and building it for the world would generate enormous amounts of cash and jobs for the UK. If we are not at the forefront of its development, other countries will jump ahead of us and we will lose the opportunity. This great nation of ours has always been at the cutting edge of technology, and certainly of engineering, and we need to maintain that tradition if we possibly can.

The process of coal gasification can capture 90% of CO₂ emissions for storage and can also produce a synthetic gas, known as “syngas”, which is 99.5% pure hydrogen. The beauty of that fuel is that, once fired through a conventional gas turbine, the only emission is water vapour. Although cleaning up the existing plants is welcome, it will not have the impact that those who want to reduce our CO₂ emissions significantly require, nor will it capture any CO₂ for alternative income generation. Coal gasification is the only process that changes one form of energy—coal—into another flexible energy source—hydrogen—but without a clear Government energy policy, IGCC technology will not happen. To be viable, the new IGCC plants require the same allocation of CO₂ allowances as existing coal plants, but at present they receive the allowances for a CCGT-fired—combined cycle gas turbine—power station.

So far, generating electricity from coal has failed the environmental test because of its carbon emissions, but clean coal offers a number of strategic advantages, including the ability to ensure sustainable and competitively priced electricity and to offset security issues and the cost of importing from volatile countries in the middle east and Russia, which is key. In the past, when I challenged Ministers who said that they were more than comfortable with our arrangements with overseas suppliers, they pointed me to the fact that we have imported a vast amount of our food over the past 50 years and we have certainly never been too concerned about that. The arrangement has worked very well, but it is important to recognise that that has been during a period in which food production has been on an enormous scale and food has been plentiful. The situation may change the second we reach a position where we are short of food.

Russia decided last year not to export a single grain of wheat. That had an enormous impact on global wheat prices overnight. I can see us in a situation in which a very similar thing happens to energy. We all remember images on the news of French lamb farmers blockading their ports and stopping imports of British lamb. Such images stick with me. Can we really depend on our neighbours when we are up against the wall? Will they look after their own taxpayers and can they look after British taxpayers at the same time? That makes me very nervous. Such situations make me think that we should ensure that we are on a secure footing and that we have enough energy in the UK to supply ourselves.

[Mr David Hamilton]

The hon. Gentleman does not need to turn to food for an example, because only a few years ago the Russians turned the gas off to the country next to them, and prices spiked right after. If that happened over a long time and more countries did it, it would really harm our energy requirements.

[Mr Spencer]

I thank the hon. Gentleman for that intervention because he makes a pertinent point. The other areas with which we are dealing, for example those in the middle east, are not as politically stable as they could be. We can easily foresee circumstances in which our ability to source energy from those parts of the world is compromised by political upheavals similar to those happening now. That could leave us exposed. I hope that we can find a way of securing our energy. We must meet rising electricity demand and smooth the less predictable output from renewables. We need to foster and promote a high-growth, low-carbon economy.

I shall now address the point raised by the hon. Member for Blackley and Broughton (Graham Stringer) on wind power and explain why I feel that wind power is not adequate to support our needs. Fitting clean coal technology to the UK’s 16 power plants would cost an estimated £6 billion. In comparison, 2,000 wind turbines will be put up in the UK over the next six years at a cost of £9 billion. The Government’s renewable energy policy is currently over-dependent on wind energy. That imbalance is largely the result of the renewables obligation, which provides no clear boundary as regards the merits of various renewable technologies, so the cheapest option in terms of start-up costs—wind power—has been pursued, irrespective of its failures on grounds of unreliability and secure energy.

The dangers of over-relying on wind power were demonstrated in Ireland on 4 December 2003, when the electricity regulator had to take emergency measures to reduce the amount of wind power on the Irish electric grid following major concerns about the security and stability of the power system. Simply because the wind blew too hard, too much power was being generated, so pretty quick action had to be taken to resolve it.

In contrast, Demark has the most intense concentration of wind generation in Europe. At peak output, Danish wind farms can account for nearly 64% of Danish peak power demand. That rarely occurs, but it does happen on occasion. Last year, Danish carbon emissions rose, because the Danish grid fell back on older fossil fuel generation to plug the gap left by underperforming wind farms. Danish power stations used 50% more coal than in 2005 to cover wind’s failings and wind turbines generated 21.7% of electricity, which is down from 29.4% in 2005. To put it in simple terms, when the wind does not blow, the turbines do not move and the power is not there. As the Danes have to have a stopgap base load, they use coal. Ironically, during that period the use of fossil fuels rose, which demonstrates the frustrations with the system that we are pursuing.

[Graham Stringer]

I agree with the hon. Gentleman completely, but the situation is actually worse in Denmark. The Danes have stopped investing in wind, because it is too expensive and destabilises the grid. When the wind is blowing, they are effectively subsidising energy in Germany and surrounding countries. They have made a terrible mistake and it would be a great pity if this country carried on subsidising wind farms—quite frankly, it would be insane given the economic state we are in.

[Mr Spencer]

I thank the hon. Gentleman for that intervention. The irony of the situation is that the German energy the Danish are reliant on is often produced with brown Czech coal, which is worse in terms of carbon emissions than UK coal. It does not make much sense at all.

I am conscious that I am taking up quite a lot of time, and I know that other Members wish to speak, so I will try to conclude as quickly as possible. If we look at the international competition, it is clear that we need to step up and ensure that we keep up with, if not stay in front of, the competition in terms of producing clean coal technology. In 2009, the Australian Government produced a White Paper entitled “Securing Australia’s Energy Future”, which backed the use of clean coal technology with coal from indigenous reserves, and UK climate change economist Sir Nicholas Stern recently told an Australian audience:

“I think Australia will be at the forefront of that technology”.

In the US, coal production is at full capacity. In 2005, 951 million tonnes were produced from indigenous reserves for energy supplies and for industrial use in steel and associated industries. President Obama said:

“We need to act now and make the US a leader in putting in place the incentives that ensure developing countries also embrace clean coal.”

The EU is also adopting a positive attitude towards clean coal technology, with President Jose Manuel Barroso stressing to an audience in February 2007 the need for

“an acceleration of the commercial use of clean coal”.

The UK must demonstrate a firm commitment to clean coal technology if it wishes to influence the behaviour of other nations, such as China and India, where rising C0₂ emissions from fossil fuels will otherwise dwarf any savings made in the UK. By 2020, China’s consumption of electricity is forecast to increase sixfold and to be 30 times that of the UK.

What is the Government’s role? Ensuring our energy security currently appears to involve laying cables under the channel, and I am concerned about how secure such an arrangement is. I can see how it could work in the short to medium term, when energy is in plentiful supply, but, as I said, I do not think French taxpayers would like their country to move to a three-day week to keep the lights on in southern England. As I said, comparisons are made with the food supply, and it is difficult to understand why we are exposing ourselves to the issues involved, when we could do better.

The Government have said that we will continue public sector investment in carbon capture and storage technology for four coal-fired power stations, but the criticism levelled at us is that we have thus far completed only the first of those four. We really need to speed up and get on with things.

In conclusion, I hope the Minister can lay some of my concerns to rest. We must keep the lights on; it is fundamental that we keep the electricity coming to this nation of ours. All the issues that we fall out about in this place will become insignificant if there is no power. Wind turbines may be of assistance, and offshore wind certainly has a role to play, albeit a small one, but I am concerned about how dependable such turbines are. Fundamentally, the base load must come from nuclear or coal, but the nuclear power stations we need to build will not be on stream in time. We are behind the game, and we need to act now to catch up and secure Britain’s energy supply, if we are to keep the economy running and the lights on.

--- Later in debate ---

[Charles Hendry]

Energy remains a retained power. Clearly, the Scottish Government have decision-making powers on planning. That is why they have ruled out such things as new nuclear in Scotland. Nevertheless, energy policy is driven from Whitehall and Westminster. We therefore believe that if this is something that we want to achieve as a national Government, then we should be in the driving seat. If the Scottish Government were to say, “Here is a few million pounds to make it happen”, we would of course be very enthusiastic and grateful to them, although there are not many indications so far that the cheque is in the post. Nevertheless, this will be taken forward by us, as a Government and as the Department of Energy and Climate Change, with a cross-party approach here, and I hope that we can find that agreement in the course of the next few months.

We have a range of technologies, an issue touched on by my hon. Friend the Member for Sherwood. This should not just be about post-combustion technology. We need to look at oxy-fuel combustion and pre-combustion technologies, and that is what we want to see coming forward. In the course of the rest of this year we will set out the nature of the competition for the remaining projects—projects 2 to 4—and look at where we would like that to add to our knowledge, the type of technology that we may wish to see coming through with that, and to apply that to gas, too. Again, the world outlook on gas has changed a great deal and we need to take account of that.

I would say to my hon. Friend the Member for Sherwood that this is a technology that is still in its infancy. We know that the individual parts of it can work. We know that it can be separated—we have seen that done on a small scale. We know that it can be transported and we know that it can be injected into the sea bed. However, nobody in the world has done that at scale, so we do not yet know what the challenges are of doing that at scale, or what the costs will be. In terms of a time scale, to have four projects running by 2020 is extremely ambitious. We are not going to arrive at a stage where we can move it beyond that. We can absolutely see this technology moving forward in the 2020s. Global ambition suggests perhaps 100 projects by 2020, but 3,000 projects by 2050. This is therefore a process that will inevitably start carefully, but then build up dramatically over time. Everything that we are doing here is determined to ensure that the United Kingdom can be in a real leadership position. What we also see from industry shows that it wants to be part of that process. The NER300 process is a European competition, and almost half of the schemes coming forward for CCS are in the United Kingdom. That shows the appetite among our industry, our universities and our whole supply chain to help lead in this area.

[Mr Spencer]

I am grateful to the Minister for giving way, as I have taken up more than my quota of time. Given that the new technology will not be on the street until 2020, we will not be in a position to build nuclear power stations to that time scale, and renewable energy will not be large enough to make the shortfall, does he anticipate that the only way we can supply the nation will be by importing that power from our neighbours?

[Charles Hendry]

No, I do not, although I see it as being an important contributor. The investment in gas that we are seeing shows that the energy company industry is keen to invest in the gas infrastructure, too. We want to see that bid grow out of renewables, but some of those technologies for UK tidal would be in the 2020s. We want to see offshore wind ramping up in the course of this decade. My hon. Friend is absolutely right that nuclear is towards the end of this decade, but as we start to deal with the crunch to which the hon. Member for Blackley and Broughton referred, we need to see additional gas infrastructure, too. We should not rule out interconnecters as part of that process.

Finally, I want to come to the issue of biomass. I am grateful to my hon. Friend the Member for Thurrock (Jackie Doyle-Price) for the point she made on that. Electricity from biomass is important to our renewable energy targets, because it brings security of supply benefits. It is dispatchable; in other words, when we need more power, we can generate more power. It can be turned up and it can be turned down. It is one of the few renewable energy sources that is genuinely adaptable in that respect. Large-scale dedicated biomass has the potential to develop significant levels of renewable electricity by 2020. Electricity from dedicated biomass is cheaper than some other large-scale electricity sources. If biomass generation needed to meet the renewable energy target was displaced by more expensive technologies, then inevitably there would be a higher cost to consumers.

It is encouraging to see the interest from Drax, which is developing dedicated biomass. The work at Tilbury is ground-breaking and I join my hon. Friend the Member for Thurrock in paying tribute to RWE npower for the work it is doing to make that happen. Part of the renewables obligation banding review, which, as I said, we have brought forward by a year, will be to determine the appropriate level of support to bring forward either biomass conversion or co-firing, because of the contribution that they can make.

In conclusion, we believe, without any doubt, that coal can play an important role in our electricity-generating mix in the future, but only if its carbon dioxide emissions can be reduced significantly. Electricity market reform will provide the commercial incentives to deliver new low-carbon plant, and our CCS demonstration programme will ensure that there is a cost-competitive solution to the emissions from coal.

I congratulate my hon. Friend the Member for Sherwood. This has been a long-overdue debate, and one that has been extremely constructive. I rejoice at the fact that we can talk about coal, with Members on both sides of the House talking about its opportunities and its importance. I welcome that—it is a big step forward.