UK coal industry plans for cheaper, reliable and sustainable power

International Mining | December 30, 2011 | 5:17 am Energy Europe Coal 

Britain’s coal producers have tabled a five-point plan that they say “will give the nation’s electricity users cheaper, reliable and sustainable power supplies whilst safeguarding jobs, stimulating investment and reducing energy imports.” The Confederation of UK Coal Producers (CoalPro) says current Government White Paper plans for decarbonised electricity “catastrophically fail the affordability test, fail the low carbon test and comprehensively fail to meet the security of supply test.”

In a New Year message to energy industry policy makers, David Brewer, Director General of the Wakefield-based organisation which represents mining and supply companies in England, Scotland and Wales says: “The current White Paper policy measures fail to meet the Government’s own criteria in every respect. Our future electricity supply will not be affordable because customers will have to fund windfall gains for existing gas and nuclear generators and pay high prices for electricity and imported gas. It will not be low-carbon because it will lead to long-term lock-in of high carbon emissions from unabated gas. It will not be secure because it will be excessively dependent on imported gas, especially at peak periods, and lead to a reduction in indigenous coal production.”

Coal currently provides 30% of the UK’s electricity, a proportion which rises to 50% or more at peak periods in winter. Coal output in the UK is increasing and is an industry worth over £1 billion a year to the UK economy. Market uncertainties resulting from Government policy measures risk the ongoing investment needed to maintain this growth with consequent premature closure of mining capacity.

Says Brewer: “Coal has for many years been a cornerstone of Britain’s electricity supply and can remain so, more cleanly and reliably, if changes are made to evolving energy policy. Britain can reduce its dependence on both imported coal and gas by putting in place policy measures which will encourage long-term investment in new capacity which will provide the nation with reliable, sustainable and cheaper supplies than relying on expensive imported gas.

“We support the Government’s commitment for secure, low-carbon and affordable electricity, and we are not opposed to the development of other forms of energy. That is why we are recommending policy changes which will ensure an ongoing role for coal and reduce the nation’s exposure to supply and price risks.”

Measures being proposed by the coal industry include:

  • Rapid implementation of the carbon-capture demonstration program
  • A review of Carbon Price Support, a tax on the carbon content of fuels used for electricity generation. It will unreasonably incentivise gas and in the first three years alone, will cost consumers £3.2 billion. It will adversely affect the competitiveness of UK industry and is a tax on jobs
  • Time-limited relief from carbon price support on the unabated proportion of plants investing in carbon capture
  • A clearly stated requirement for the progressive retrofit of carbon-capture plant at gas-fired power stations to an early defined timescale
  • A clear signal that capacity payments, intended to ensure sufficient generating capacity is available to meet demand during the transition to low-carbon electricity generation, will be available to existing coal-fired plant through the mid 2020s.

Brewer adds: “Unless the government acts quickly, electricity consumers will be locked in to getting their power supplies from high carbon gas-fired stations, intermittent wind and inflexible nuclear power. With a more level playing field, we can continue the progress in reducing emissions without it costing the earth for power users.”

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