APPENDIX 2
Letter to the Committee from Confederation
of UK Coal Producers
MEETING SCOTLAND'S FUTURE ENERGY NEEDS
The Confederation of UK Coal Producers (CoalPro)
represents member companies who produce over 90% of UK coal output.
I understand that the Scottish Affairs Committee welcomes written
evidence on, amongst other issues, how the shortfall in energy
output can be met once nuclear power no longer provides Scotland's
energy needs.
CoalPro assumes from the above that the Committee
has concerns about the provision of adequate electricity supplies
in Scotland following the closure of the Hunterston and Torness
nuclear power stations which is expected to take place before
2020.
However, CoalPro believes that these concerns
are likely to underestimate the extent of the problem as, under
the Large Combustion Plants Directive (LCPD), decisions taken
by Scottish Power are likely to also lead to the closure of both
of Scotland's coal-fired plants, Longannet and Cockenzie, by 2015.
The LCPD requires operators of coal-fired power
plants to meet stringent emission limits for sulphur dioxide (SO2),
oxides of nitrogen (NOx) and dust from 1 January 2008 onwards.
Operators can "opt out" of the Directive in respect
of any individual power station, in which case the operation of
individual generating units will be limited to a total of 20,000
hours (less than 2½ years of continuous running) after which
they will have to close. Closure is required in any event by the
end of 2015. In addition to these operating restrictions, plants
would still have to meet emission limits under the IPPC regime.
Scottish Power have chosen to opt out both the
Longannet and Cockenzie power stations under the LCPD. Whilst
they have up until 30 June 2005 to reverse this decision, it is
considered unlikely that they will do so. This means that both
these power stations will have to close by the end of 2015 and
that each unit thereat can only operate for a total of 20,000
hours between 2008 and 2015.
The position could yet be worse. If, having
used up a proportion of the 20,000 hours, any of the units at
either of these stations requires major expense, then the question
will inevitably arise as to whether such expense would represent
a viable proposition in the light of the remaining available operating
hours. Premature closure of some, or all, of the generating units
at the stations is therefore entirely possible.
The overall impact, therefore, is that at some
time between 2010 and 2020, the great majority of Scotland's electricity
generating capacity will close. The remaining capacity will comprise
hydro and renewables, the gas-fired power station at Peterhead
and certain CHP installations.
The Scottish Executive has an objective of generating
40% of its electricity from renewable sources by 2020. Even if
this ambitious objective is achieved, renewable generation is
intermittent and cannot be relied upon to supply electricity when
required at times of peak load. Such a level of renewable generation
capacity would need to be supplemented by generating plant capable
of rapid load following for peak loads, and constantly by "spinning
reserve".
The gas-fired plant at Peterhead might be able
to provide some of this back up, but is far from ideally suited
to doing so. CCGTs were not designed to ramp up and down rapidly
and lose considerable efficiency when required to do so. In any
event, the capacity of this station would be fully required in
winter periods.
Scotland would therefore have to rely at times
of higher electricity demand, and more generally for spinning
reserve, on imports of electricity across the interconnector from
England, and specifically from the remaining English coal-fired
power stations (ie those that have not opted out of the LCPD).
The question must arise as to whether the capacity of the interconnector
would be adequate in all circumstances.
Assuming that hydro/renewables generation cannot
be higher than 40% by 2020, are there any other alternatives?
Only new build, nuclear, gas or coal, would appear to be a feasible
alternative, and perhaps only new build coal could provide the
operating flexibility required.
I cannot comment on the likelihood of new nuclear
build, but it is apparent that nuclear stations cannot operate
flexibility. New gas-fired capacity may be capable of being designed
to do so, but gas prices have been raising rapidly and North Sea
gas production from the UK sector is now in decline. The gas would
therefore have to be imported.
Fortunately, all may not be lost with respect
to coal-fired generation in Scotland. First, it is unlikely, but
not inconceivable, that Scottish Power may decide to fit flue
gas desulphurisation at Longannet. This would enable that station
to opt back in again by 30 June 2005.
Secondly, it is known that Scottish Power have
been in discussion with Mitsui-Babcock about advanced coal generation
technology in relation to Longannet. If such technology were to
be installed there, it would enable the station, which is relatively
modern, to meet the requirements of the LCPD with respect to new
plant, and therefore to continue beyond 2015.
It may be that the Committee will wish to seek
a submission from Scottish Power with respect to both of the above.
CoalPro is pleased to be able to submit written
evidence as set out in this letter and remains willing to provide
any further information that may be required.
David Brewer
Director General
6 January 2005
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