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Baroness Carnegy of Lour: My Lords, the fourth and fifth lines from the bottom of page 8 in the Marshalled List make up proposed new paragraph (2) in the amendment, which reads:


Are those modifications limited in any way? When Parliament legislates in such a way, it is usual to make quite sure that such modifications are limited to the matter under consideration in the relevant part of the Bill.

Lord Triesman: My Lords, the geographical limitation is quite clear; it is self-evidently to Northern Ireland. The energy licence conditions in general are modifications simply intended to ensure that the proceeds of the sale of NFFO NIROCs in Northern Ireland are used to offset costs to Northern Ireland consumers. I do not think that there is a limitation placed on the extent to which that may be achieved; it will probably be conditioned in large measure by the sums realised.

On Question, amendment agreed to.

29 Mar 2004 : Column 1080

6.15 p.m.

Lord Ezra moved Amendment No. 192:


    After Clause 109, insert the following new clause—

"CHAPTER 4

ELECTRICITY GENERATION USING CLEAN COAL TECHNOLOGIES
OBLIGATION IN CONNECTION WITH ELECTRICITY FROM COAL
After section 32C of the 1989 Act there is inserted—
"32D OBLIGATION IN CONNECTION WITH ELECTRICITY FROM COAL
(1) The Secretary of State may by order impose on each electricity supplier falling within a specified description (a "designated electricity supplier") an obligation to do what is set out in subsection (3) (and that obligation is referred to in this section and sections 32E to 32G as the "clean coal obligation").
(2) The descriptions of electricity supplier upon which an order may impose the clean coal obligation are those supplying electricity—
(a) in England and Wales;
(b) in Scotland; or
(c) in Northern Ireland,
excluding such categories of supplier (if any) as are specified.
(3) Subject to the provisions of this section and sections 32E and 32G, the clean coal obligation is offered to designated electricity suppliers who, before a specified day, produce to the Authority evidence of a specified kind showing—
(a) that it has supplied to customers in the United Kingdom during a specified period such amount of electricity generated from coal by using clean coal technologies as is specified in relation to such a supplier;
(b) that another electricity supplier has done so (or that two or more others have done so); or
(c) that, between them, they have done so.
(4) Before making an order, the Secretary of State must consult—
(a) the Authority;
(b) the Council;
(c) the electricity suppliers to whom the proposed order would apply;
(d) the generators of electricity from coal; and
(e) such other persons, if any, as he considers appropriate.
(5) In this section—
"clean coal technologies" means specified technologies for the generation of electricity from coal that meet specified pollutant emission performance criteria.
"specified" means specified in the order.
(6) An order under this section shall not be made unless a draft of the instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.""

The noble Lord said: My Lords, with the amendment are grouped Amendments Nos. 193 to 195, which are consequential. The amendment deals with the need as I see it for an obligation for the use of electricity from coal. I moved a similar amendment in Grand Committee on 12 February and have taken careful note of what was said on that occasion. I have drafted this amendment accordingly.

Coal now represents our most substantial energy reserve. We are running out of oil and gas in the North Sea and shall become increasingly dependent on imports. It is therefore important to work out ways in which those reserves of coal can be used effectively to

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diminish our import dependence. As we all know, the problem with coal is that, burnt in traditional methods, it creates a lot of pollution. However, there are ways in which it can be burnt to minimise that pollution.

The Government have supported the concept of clean coal technologies—I refer specifically to page 92 of the energy White Paper—and have drawn attention to the fact that they can be relevant not only to our use in this country, but even more so to countries such as China and India that will use substantial quantities of coal. They have very big reserves of coal for the future and it is important, from the point of view of the global environment, that they burn that coal in as efficient a manner as possible. Therefore, the existence of plant in the UK demonstrating the ways in which that could be done would be of considerable importance not only here, but in the promotion of our activities abroad.

The amendment is drafted to limit the possibility of introducing such an order until substantial consultations have taken place and until, under its proposed new subsection (5), "clean coal technologies" are defined as,


    "the generation of electricity from coal that meet specified pollutant emission performance criteria".

In other words, we are talking about issuing orders for the use of coal after it has been treated in a green manner, and after very full consultation.

Let us be quite clear: even if, as I hope, such a provision were included in the Bill, it would take a long time before the fuel could come on to the market. It would be at least three years before one, two or perhaps even three medium-sized electricity generating plants would be constructed and the order could bite. Therefore, there is not very much commitment to financial involvement.

On the other hand, such a provision in the Bill would achieve two important things. First, it would encourage the coal industry, which now has grave doubts about its future, and to which I believe the Labour Party has traditionally given its wholehearted support. Here is a way of reinforcing that support, having regard to future environmental considerations. Secondly, as I have pointed out, this could open up enormous prospects for exports. But I do not believe that we can persuade possible overseas customers to accept our technology unless we have something to show them. At the moment we have nothing. We have a limited amount of research, which is much overshadowed by greater research efforts in the United States and elsewhere.

This could be a positive measure that is much in line with the objectives of the energy White Paper. It could help to diminish our growing dependence on imports and could give some prospect of a future to our largest remaining indigenous energy resource. Therefore, I beg to move.

Lord Jenkin of Roding: My Lords, I was intrigued by the comments of the noble Lord, Lord Ezra, about the traditional support given by the Labour Party to the coal industry and I thought of the enormous burden

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that now rests on the shoulders of the noble Lord, Lord Randall, because of his position as sole occupant of the Labour Back Benches. I beg the House's pardon, because the noble Lord, Lord Carter, has just appeared. That makes two.

The noble Lord, Lord Ezra, makes an important point. Very little is being done in this country to advance the cause of clean coal technology. Indeed, it is not many months since one of the effects of NETA—the electricity trading arrangements—drove DRAX almost out of business, operating for only four hours out of 24. That was not a clever move, because DRAX power station has the greatest amount of flue gas desulphurisation in this country. The noble Lord is correct to say that there is a huge amount of work being carried out in other countries and that should be the case here.

I remember a visit I made some years ago, as a shadow energy spokesman, to the Coal Industry Research Establishment, just outside Cheltenham. There I encountered a technologist who appeared to be working on his own on the underground gasification of coal as a much better way of exploiting our coal resources than by sending men down the pits. I put my arm around his shoulder and said, "My friend, I don't know whether you realise it, but you may have the entire future of the coal industry on your shoulders". I do not know what became of that research, but it is one of the ways in which—through underground gasification—one can produce a product that can be treated effectively with a variety of refining techniques and produce what the noble Lord, Lord Ezra, seeks: the ability to take heat from coal without generating carbon dioxide and other noxious gaseous emissions. We ought to be doing that.

After consulting briefly with several people in the electricity industry, I found that they had not heard of the amendment tabled by the noble Lord, Lord Ezra, and they felt that to introduce it at this stage might be premature. But I hope that the Government will take seriously the comments of the noble Lord about the need to step up research on clean coal technology. It is essential because, as the noble Lord said, we have hundreds of years of reserves and it would be foolish if a technology were devised that we could not use. Although we may not feel able to support this particular amendment, the thought behind it is extremely important.


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