APPENDIX 8
Memorandum from The Confederation of United
Kingdom Coal Producers
The Confederation of UK Coal Producers (COALPRO)
is the trade body that represents some 90 per cent of coal producers
in the UK, including RJB Mining. Coal Mining and related activities
directly employ over 40,000 people in the UK and have a turnover
of in excess of £2,000 million. The industry spends over
£1,000 million in wages and salaries and about £250
million is paid in tax, rates and other community benefits.
COALPRO welcomes the opportunity to submit comments
to the Environmental Audit Committee on recent policy developments
within the energy market. COALPRO believes that the Committee's
original recommendations did not fully take into account the role
of UK coal within the country's energy mix. The case for the UK
coal industry is stronger than ever given the contribution it
continues to make to energy security, diversity and sustainability
at competitive prices.
With regard to specific points raised by the
last report, we have the following comments.
1. FUEL SECURITY
Recent technical problems with the French Link
and AGR and Magnox reactors have shown the value of UK coal to
the provision of UK energy security. In mid-January COALPRO members
were called upon to increase supplies by around 25 per cent to
alleviate the problems with the above generation. The UK coal
industry can be relied upon to play its part in a secure diverse
energy policy and it is important that Government policy recognises
this fact and does not side-line coal to being a bit part player
in the UK energy scene.
The recently published DTi Energy Projections
for the UK indicate a falling coal burn. We disagree with assumptions
used, especially the low oil prices and closure dates of coal
power stations which favour the use of gas. In the central low
scenario there is a 73 per cent increase in gas burn between 2000
and 2020, all of which would have to be sourced by imports via
a network system not yet in place. A copy of our critique can
be supplied if required.
2. CHP
COALPRO has always supported good quality CHP,
whatever the primary fuel. We have however, opposed CHP schemes
which we believe have been deliberately oversized in an attempt
to bypass the current planning process. COALPRO supports the underlying
principle adopted by the DETR in attempting to define good quality
CHP schemes but feels it is unnecessarily complicated with which
technology bands. It is irrelevant for Government to be concerned
with which technology a developer may choose for any particular
applications. The key principle is how effectively the input fuel
is used. If scale economies mean that it is more efficient to
generate at large central power stations then so be it, there
should be no artificial bias towards small scale generation within
Government policy.
3. STRICTER CONSENTS
POLICY
One of the conclusions of the Government's energy
review in 1998 was that there were significant distortions in
the present electricity pool system which have encouraged gas
stations beyond the level justified by underlying economics.
COALPRO believes that until the new electricity
trading arrangements are introduced and seen to be working, the
stricter consents policy on the building of new gas power stations
should be kept in place. Once the Government has completed the
six items on its reform programme, as identified in the White
Paper, we look forward to effective and fair competition between
coal and gas power stations.
4. FUEL POVERTY
The recent White Paper confirmed that electricity
generated from existing coal-fired power stations is lower than
from new gas stations. The figures are 1.6p/kWh for existing coal
stations and around 2.0p/kWh for new CCGTs at baseload. Coal generation
therefore can play a major role in delivering low electricity
prices to help alleviate fuel poverty. COALPRO estimates that
it has cost the consumer over £250 million per annum in purchasing
electricity from higher cost gas power stations since 1998.
5. CLEANER COAL
TECHNOLOGY
Coal can be compatible with current Government
environmental policy if we start demonstrating cleaner coal technology
with its superior efficiency and environmental performance. Cleaner
coal technology has virtually no sulphur dioxide or particulate
emissions and has greatly reduced emissions of nitrous oxides.
It can deliver efficiency improvements and hence reduced CO2 emissions
of up to 20 per cent, whilst at the same time providing security
and diversity of supply.
COALPRO believes a demonstration programme of
5GW of cleaner coal technology in the UK would provide a shop
window for technology deployments on a global basis and represents
the greatest contribution that the UK can make to global emissions.
For example just a 1 per cent increase in efficiency in coal power
stations, projected to be in operation in the developing world
in 2010, would reduce global carbon emissions by 50 per cent more
than the UK's commitments under the Kyoto Protocol.
COALPRO calls for cleaner coal technology to
be included in any obligation placed upon electricity suppliers
under the Utilities Bill to purchase electricity from new and
renewable energy sources and for supply to be available under
monies raised under the Climate Change Levy.
COALPRO would wish the Committee to consider
the above evidence and would be prepared to further discuss these
matters if you felt it so appropriate.
March 2000
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