APPENDIX 2
Memorandum from the Confederation of UK
Coal Producers
1. INTRODUCTION
The Confederation of UK Coal Producers (COALPRO)
is the trade body that represents some 90 per cent of coal producers
in the UK. 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 fully supports the UK Government's energy
policy to "secure diverse and sustainable supplies of energy
at competitive prices" and believes that renewables together
with clean coal technology can help deliver this goal.
2. RENEWABLES
DEVELOPMENT
In 1999 renewables accounted for less than 3
per cent of UK electricity generation. The Government's target
is to have 10 per cent of the UK's electricity generated from
renewable sources by 2010. They have outlined a programme to achieve
this goal via the Renewables Obligation, which imposes a duty
on electricity suppliers to sell specified quantities of renewable
electricity otherwise face financial penalties.
The 10 per cent renewables target has now been
factored into the DTI's forward energy projections and the Government's
Climate Change Programme. Looking at historic data on renewables
development, COALPRO's concern is that these targets will not
be met. As at September 2000, 3.64GW of plant had been contracted
under the UK Non Fossil Obligation (NFFO) rounds but only 0.86GW
has been commissioned, less than 25 per cent of the total. A breakdown
of schemes within England and Wales is shown below:
ENGLAND AND WALES NFFO SUMMARY AS
AT 30 SEPTEMBER
2000
| |
Contracted Capacity
(MW)
| Commissioned Capacity
(MW)
| Completion Rate 0%
|
| NFFO 1 (1990) | 152.1
| 144.5 | 95
|
| NFFO 2 (1991) | 472.2
| 173.7 | 36.8
|
| NFFO 3 (1995) | 626.9
| 262.5 | 41.9
|
| NFFO 4 (1996) | 842.7
| 137.2 | 16.3
|
| NFFO 5 (1998) | 1,177.1
| 50.1 | 4.3
|
| | 3,271.1
| 768.1 | 23.5
|
The low completion rate can be attributed to, in the main,
problems in obtaining permissions through the local planning system.
The same planning difficulties exist with out Members' applications
for new opencast sites. Whilst it is desirable to see an increase
in renewables capacity, COALPRO would not wish to see a distortion
within the planning system which favoured one energy source at
the expense of others.
3. COST OF
RENEWABLES
Electricity generated from renewable sources is more expensive
than from conventional sources. Since 1990 around £700 million
has been spent on supporting renewables, raised via the Fossil
Fuel Levy on consumer bills.
The Government in their Renewables Obligation propose to
allow electricity suppliers to charge consumers an additional
3 p/k Wh over and above the market price. This will set the price
for renewable electricity at around 5.3 p/k Wh and the Government
estimate it will cost consumers around £600 million per annum
by 2010. Even at this high price many developers of Biomass and
photovoltaics claim the support price is too low. In comparison
electricity generated by clean coal technology, which could deliver
25 per cent reduction on CO2 emissions compared to
existing coal stations, would cost around 3-3.5 p/k Wh.
COALPRO therefore calls for the Government to introduce a
"clean energy" obligation which could include clean
coal based on the same principles of the Renewables Obligation.
We have already expressed our concerns that the 10 per cent UK
renewables target by 2010 will not be met. Additional support
for "clean energy" would give the Government confidence
that its Climate Change Programme would be met, whilst preserving
fuel security and diversity within the UK.
4. COAL MINE
METHANE
COALPRO would also call for the widening of the definition
of a "renewable" to include mine gas from abandoned
and working collieries. Historically it has always appeared anomalous
to COALPRO that generation from landfill gas was included with
the NFFO support mechanism, yet generation using mine gas from
abandoned and working collieries was not included. Methane is
particularly damaging to the environment having a global warming
effect 21 times that of carbon dioxide on a mass basis. The granting
of "green status" to mine gas projects would further
encourage schemes which could make a significant contribution
to the UK's environmental targets.
5. COAL MINING
WASTES
The coal industry could reduce the volume of waste going
to land and even recover waste previously laid down in lagoons
and tips by utilising solid and wastes as poor quality fuel. The
economics of using these wastes for power generation are not favourable,
but would become so if there was an incentive under the Renewables
Obligation. COALPRO calls for such environmentally desirable developments
to be supported.
6. GENERAL COMMENTS
ON WASTE
The Renewables Obligation preliminary consultation document
states that energy from waste (EfW) is already viable and therefore
should be excluded from the Obligation. COALPRO believes that
energy from waste technologies have an important role in helping
to meet the Government's target of generating 10 per cent of electricity.
Exclusion from the Obligation would undermine the Government's
waste strategy and compromise the electricity suppliers' ability
to deliver the 10 per cent target.
We recognise the Government's desire to distance itself from
any politically undesirable association with large scale EfW using
mass burn technology. However, we would suggest that the Government
considers the need to support more advanced technologies, such
as gasification and pyrolysis, that are far from commercial. These
technologies offer state of the art environment performance and
could gain economies of scale if combined with coal in large gasification
units.
7. CONCLUSIONS
Based upon past performance it is unlikely that the Government's
10 per cent renewable target will be achieved by 2010. It is therefore,
important that investment is made quickly into clean coal technology
to help achieve the UK's Kyoto targets. This can be achieved via
the introduction of a "clean energy" obligation. Electricity
from clean coal also has the benefit of being cheaper than renewables
and will protect fuel security and diversity which are central
to the Government's energy policy.
COALPRO also calls for mine gas from abandoned and working
collieries to be defined as a renewable source and advocates the
need to support advanced technologies in energy from waste schemes.
January 2001
| 
