25 March 1998

The Rt Hon John Redwood MP Shadow President of the Board of Trade

The green side of the Government are proposing much tighter controls on sulphur dioxide emissions. Were they to go ahead with these plans it would entail a sharp reduction in the amount of coal mined and burned in power stations. It would be impossible to meet these tough targets without undertaking a large reduction in the amount of coal used for electricity generation. The Prime Minister has also pledged that the United Kingdom will cut its output of CO2 by one fifth. Again it would be difficult to meet this target without reducing the amount of coal burned in power stations. CO2 emissions from other forms of energy generation are lower than from coal-derived electricity.

Another side of the Government is trying to promote the idea that more coal should be mined and burned. They believe that the Labour Government does owe some obligation to the miners and should try to stabilise the existing level of coal mining activity in this country. If they are to do so they will have to actively promote a bigger market for coal and encourage at least the retention of the existing amount of coal powered generation capacity. They would have to interfere in the merit order and in the system of bidding electricity from power stations. The case for coal says that running the existing coal stations flat out as baseload suppliers would deliver cheaper energy if you do not take into account the replacement costs of the capital equipment being used.

The Government must come to some decisions urgently. Both the gas industry and the coal industry are in a state of limbo awaiting decisions from the Government. How many more gas fired power stations are going to be permitted by this Government? Are they going to continue with their moratorium on new gas power stations being built? Are they serious about cutting sulphur dioxide and CO2 emissions from power stations or aren't they? Are they going to put any muscle behind clean coal technology? It is high time they made some decisions and defined whether this Government took the green targets more seriously or miners' jobs.

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