Select Committee on Environmental Audit Minutes of Evidence


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.


  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.


  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.


  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.


  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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