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12.43 pm

The Minister for Science, Energy and Industry (Mr. John Battle): Usually, in Adjournment debates, hon. Members draw the House's attention to a complaint or a difficulty in their constituencies. Rarely have I heard a speech so full of practical vision and new possibilities as the thought-provoking contribution of my hon. Friend the Member for Wansbeck (Mr. Murphy). He said that the north-east was rich in ideas, innovation and engineering, and I think that his speech more than demonstrated that.

I am determined that the need to generate energy should not be seen to be at odds with consideration for the environment and the future. My hon. Friend presented us with his vision of a new energy centre, blending clean-coal technology with the recycling of waste; he also conveyed a sense of balance that I found very helpful. I agree with him about the need to think things out at a local level and to see that process as a microcosm that shows what can be done with the aid of practical vision, nationally and internationally.

I believe that clean-coal technologies are the key to the coal industry's future, not only in Britain but internationally. World coal use is likely to increase from 3.5 billion tonnes to more than 5.3 billion tonnes by 2010, and increases substantially beyond that are forecast. If that amount is to be burned, it is vital for clean-coal technologies to be developed. We have some experience here in Britain.

I assure my hon. Friend that the Government support the development of clean-coal technology and welcome his endorsement of a sustained, diverse, secure and integrated approach to energy generation. I have visited Alcan power station and, as an Opposition spokesman, I visited Northumbria university and saw its photovoltaics. Great work is going on there. There is also an earth balance project, which brings together a range of new technologies and spells out the fact that, by integrating such technologies, we can find a practical way forward that provides much-needed energy and warmth for local communities.

We must concentrate on the tough environmental challenges we face. My hon. Friend referred to the setting of targets that might prematurely squeeze out energy generation and jobs. At the Kyoto conference, the European Union agreed to reduce its emissions of a basket of six greenhouse gases--including carbon dioxide and sulphur dioxide--by 8 per cent., relative to the 1990 level, during the period 2008-12.

On 17 June, at the meeting of the Environment Council in Europe, member states agreed on the way in which the target should be apportioned. Our target is a 12.5 per cent. reduction. That means that the time for talking is over. We must establish programmes to meet the targets--and that brings us back to the practical vision presented by my hon. Friend.

Clean-coal technologies have an important part to play in the delivery of the agenda. Coal burning leads to emissions of sulphur dioxide and nitrous oxide--usually

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referred to as sox and nox. We must reduce the level of pollution. We are keen to support cleaner coal technologies. I emphasise the word "cleaner": no energy generation source is entirely pure and clean, and that includes renewable energy and even wind farms. I am not suggesting that schemes in Blyth and elsewhere are challenged by environmental insensitivities, or for aesthetic reasons; I am saying that we can aim for cleaner forms of generation and look to renewable sources such as combined heat and power to reduce the amount of waste.

Sulphur dioxide emissions from the major electricity generators in England and Wales are already programmed to fall to 365 kilotonnes in 2005. That target--with significant interim reductions--must be achieved. We believe that coal-fired generators must now take reasonable steps to run their plant more cleanly. Cleaning up at the back end, as it were, with fluidised gas desulphurisation is one option. At present, two plants in Britain--National Power's Drax plant, and PowerGen's Ratcliffe plant in the midlands--are the only ones that do that. We must also consider the front end, in the hope that coal can be burned not only in a cleaner way--as my hon. Friend suggested--but in a more energy-efficient way. We need to tackle not just the nox and the sox, but carbon dioxide emissions. I know that my hon. Friend appreciates that.

We are faced with real challenges. The Environment Agency is now discussing with generators proposals to revise emission limits. We expect those discussions to encompass the implications of, for example, the likely lifetime and usage of coal-fired power stations and policy on flue gas desulphurisation systems. In our recent policy statement on power generation sources--which we put out for consultation--we recommended that all power generators should consider fitting FGD immediately as a means of meeting targets on sulphur dioxide emissions. We must go further and develop the work that we have done on clean-coal technology.

Blyth power station is owned by National Power. I am not sure from my hon. Friend's comments whether National Power has been presented with this vision of Blyth as an energy centre. I am more than happy to discuss this matter further with my hon. Friend, and to approach National Power directly to see whether such a vision can be implemented.

There are European directives and legislation on waste. I am not clear about combining waste pellets with the new developments in clean-coal technologies. I am more than happy to explore all the possibilities with my hon. Friend, rather than let them remain fallow.

My hon. Friend mentioned the wind project at Blyth harbour. It is one of the wind farms of the future, because wind generation will move from the highlands to the coast and offshore. We are currently preparing for that in our proposals for renewable energy support through the non-fossil fuel obligation projects.

It is evident that clean-coal plants will have to have considerably lower emissions of carbon dioxide, sulphur dioxide and nitrous oxide than existing coal-fired plants. They should not generate solid or liquid waste that results in the environmental problems associated with power stations. Constraints will be tighter in the future, and we must find ways of coping with them.

I emphasise that my Department already has a clean-coal research and development programme. It has supported a substantial portfolio of clean-coal

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technologies in the past few years. We recently conducted a thorough review to see what we can be done to bring together the research carried out under the Department's energy directorate and under the science budgets. The Government support £3.7 million-worth of research on clean-coal technologies. The development of advanced power generation technologies offers the promise of developing technologies with efficiencies of more than 50 per cent.

At present, an ordinary, traditional, coal-burning power station burns at about 38 per cent. thermal efficiency. The new gas power stations--the combined cycle gas turbines--burn at about 58 per cent. at best. If we move to combined heat and power, the figure could be as high as 90 per cent. We must also improve the thermal efficiency of traditional coal-burning power stations. Clean-coal technologies are not just about removing the nox and the sox; they are also about increasing thermal efficiency. Some of the technologies can achieve efficiencies of more than 50 per cent. That will be a bonus for those power stations.

People are wrong to write off clean-coal technology and to say that it is not practical because the rules will change. It is wrong to say that it may remove sulphur dioxide and nitrous oxide but will not help with carbon dioxide. It can help to tackle the carbon dioxide targets.

Technologies are beginning to be available: they are under development and will soon be brought on stream. A few companies in Britain are planning to build new clean-coal power generation plant. Global Energy has recently applied for a section 36 approval to build a 400 MW plant in Scotland. Celtic Energy is examining the feasibility of building a 250 MW plant in Wales. PowerGen and National Power have invested in clean-coal plant overseas. They see a huge market for clean-coal technology. If that is the case, there must be potential in Britain.

Funding is available through the European Union thermie and joule programmes. Under our presidency of the EU, I negotiated the fifth framework science programme, and we are about to launch the next tranche of proposals. Budgets must be settled in detail, so it may be implemented in 18 months' time. Companies should put in their bids and see whether their vision can be implemented using that grant. There is potential under that programme.

We shall publish an energy paper in the autumn setting out our new policy on clean-coal technology. We have to tie in the details with the comprehensive spending review and we must think through the implications for each local programme. We intend to include in our energy paper the recommendations of the science panels that highlighted clean-coal technologies as a way forward.

The impact of clean-coal technologies will not be immediate, because they take time to develop. There are about six options. It will not be easy to find the best, most appropriate option that will meet the targets for the future. The options include supercritical or advanced pulverised fuel, atmospheric fluidised bed combustion, pressurised fluidised bed combustion, integrated gasification combined cycle and air gasification-gas turbine.

The second generation of clean-coal technologies are also being developed. I emphasise that there are a number of technologies, and they meet different needs. They

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include the new British Coal air blown gasification cycle and various others. My hon. Friend the Member for Barnsley, East and Mexborough (Mr. Ennis) is present. It grieves me that we developed clean-coal technology--it was developed at Grimethorpe in Yorkshire--but let the patent pass to ABB, and now a Swedish-Swiss company markets it throughout the world. We should be back at the forefront of clean-coal science and technological development. We must show the international use of those technologies, because I am convinced that there is an international market, which will ensure that coal has a solid future.

My hon. Friend the Member for Easington (Mr. Cummings) mentioned the challenge that we face in Europe. Two UK companies have lodged objections with the European Commission to the coal subsidies in Germany and Spain. We are supporting them to ensure that our industry is not damaged by unfair subsidies elsewhere. It is not comfortable to press the case, but we shall tackle unfair competition that damages our industry. Celtic Energy has already obtained a settlement, but we must keep pressing to ensure that our companies are not damaged. The rules should not be applied disproportionately and unfairly at the expense of our industry. Our actions are in marked contrast to those of the previous Government. If we use the language of a level playing field, we should fight to ensure that we get one.

Our review of renewable energy policy has considered how we can meet 10 per cent. of demand from renewable sources. Our target is for 10 per cent. of energy generation to come from renewables by 2010. That leaves 90 per cent. to be generated from coal, gas and nuclear power, so it is only a modest proportion. We are reviewing the panoply of renewable energy, including biomass from crops, which can be turned into pellets, and wind, offshore and onshore, which has developed quite quickly. We are considering the capacity of hydropower to see whether there is small-scale potential. We are also looking at methane gas from landfill waste as a means of generating energy.

I recently visited a school to launch the first solar panel in a school under the SCOLAR programme. We want youngsters in 100 schools to experience photovoltaic technology and to see how energy can be generated from light and can be developed to become economic so that it can be used in the new century. We are investing resources in that area, and are pushing the agenda forward.

The Government are giving such priority to renewable and new sources of energy, including clean-coal technology, that we are moving to the forefront of the debate in Britain and in Europe. Selling that technology internationally creates jobs and ensures that other parts of the world get cleaner sources of energy. It is a win, win situation. Developing the technologies generates new work and jobs, enhances the environment and tackles degradation and environmental challenges. I hope that that vision matches our intensely local vision. Perhaps that beacon can be a means of showing the way to tackling energy generation and the environment in an integrated and balanced way. In future, we should not set energy generation against the environment but adopt practical and positive ways that will enable us to respect the environment, tackle the pollution that we have inherited and ensure that there is enough heat and light to serve our needs.

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