Gas Prices

Trade and Industry written question – answered on 19th January 2006.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

To ask the Secretary of State for Trade and Industry what assessment he has made of the environmental impact of energy companies choosing to use their coal fired power stations rather than their gas fired power stations because of high gas prices.

Photo of Malcolm Wicks Malcolm Wicks Minister for energy, Department of Trade and Industry

Any increase in overall annual CO 2 emissions from coal fired power stations running at a higher rate than usual will need to be covered by allowances under the EU Emissions Trading Scheme. There is a fixed number of allowances which are allocated directly to installations, such as power stations. If an installation wants to increase emissions above its allowance, it will need to buy extra allowances from other holders of allowances who are able to abate emissions and therefore have allowances to sell. Allowances can also be bought through Kyoto protocol mechanisms whereby credits can be bought for emissions reductions in mainly developing countries. The Emissions Trading Scheme therefore works to ensure that those responsible for increased CO 2 emissions on an annual basis have to pay for offsetting reductions in emissions elsewhere.

Other environmental impacts from coal fired electricity generation are subject to controls which are monitored and enforced by the Environment Agency. These controls are designed to offer sufficient flexibility to respond to changing commercial circumstances without compromising overall environmental objectives.

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