I beg to move,
That this House
has considered the future of coal-fired power station sites.
It is a pleasure to serve under your chairmanship, Ms Ryan. I thank hon. Members and my hon. Friends for attending this afternoon’s debate. My hon. Friend the Minister might be wondering why he is to respond to a debate that, on face value, may seem to be within the remit of the Department of Energy and Climate Change. It is because my contribution will focus on the future of coal-fired power station sites once the plants have ceased to operate. The issue will affect all coal-fired power stations over time, as the Government have announced that they plan to phase out coal-fired energy generation by 2025, given our commitment to reducing our carbon emissions.
For many coal-fired power stations, 2025 is a long way off. Five stations across the country have announced either their closure or part-closure over the past few months. There is now a real need to consider the future of those sites. The remaining coal-fired power stations face an uncertain future, too, and I am sure that there will be hon. Members who would like to address the issue of using the existing energy generation infrastructure for biomass conversion.
Rugeley B in my Cannock Chase constituency is one of the five power stations to announce its potential closure. In February 2016 the station’s owner, Engie, announced the likely closure of the plant this summer. The potential closure has come much sooner than expected and was accelerated by deteriorating market conditions. There are various issues: the future development of the site, given its size, location, connectivity and strategic importance to the west midlands; the need for the site to be developed speedily to create new jobs, as well as to mitigate the financial impact on the local council due to the loss of business rates; and the need to consider the planning process for building combined-cycle gas turbines where power stations already exist.
I will start by setting out the story of Rugeley B to date and how we find ourselves in a situation in which the power station could potentially shut in a matter of weeks. Cannock Chase was once dominated by mines and power stations. Now, Rugeley B is the last remaining reminder of our mining heritage. At one time, Rugeley A and B were the centre of innovation in coal-fired power generation. Rugeley A was home to a dry cooling tower and was a test-bed for locating power stations in areas with no water supply. Rugeley B saw the testing of different coloured cooling towers. Ms Ryan, if you happen to pass the Rugeley B cooling towers, I encourage you to take a good look at them, as you might notice that they are made from two different colours of brick. The intention was to assess which colour blended more effectively into the countryside and landscape. To be honest, I am not sure that either achieves that aim.
A few years ago, the owner of Rugeley B considered conversion from coal to biomass. In 2013, however, it decided that conversion was not commercially viable. Like many other hon. Members, I have spoken about the benefits of biomass as a fuel for energy production.
I congratulate my hon. Friend on securing this debate. I know of her close interest in this issue. Those of us who are members of the all-party parliamentary group on biomass have continued to push the fact that biomass is the cheapest form of renewable energy in this country, but under the contracts for difference scheme it is currently outside of future bidding. Does she agree that it makes sense to go for the cheapest source of renewable energy? We get biomass from secure sources in the US and Canada, and biomass will secure jobs in this country in a way that some other technologies that have been deployed do not.
My hon. Friend will not be surprised to learn that I agree. We need to create a level playing field to allow us to compare biomass with other renewable sources, such as solar and wind. Unfortunately, as regards creating a level playing field, I fear that this debate comes too late for Rugeley B.
On a positive note, where there were once mines and Rugeley A, there are new homes, business parks and logistics centres, which have created thousands of new jobs. The change in the industrial landscape demonstrates the area’s resilience in adapting to the challenges it faces. The chairman of the Stoke-on-Trent and Staffordshire local enterprise partnership referred to the area’s resilience in a recent letter to me, citing the changes over the past few decades since the closure of the pits. Over recent years, under a Conservative-led Government, Cannock Chase has been doing well. Unemployment has fallen, with the claimant rate falling by 75% since March 2010. Apprenticeships are on the up, and new business start-ups are increasing. However, despite the local success story over the past few years, the news that Rugeley B may close this summer is a blow to all of us who live in Rugeley.
My hon. Friend mentioned Rugeley A, which happened to be in the Lichfield constituency, so I have a personal interest in this debate. Does she agree that, as tragic as the closure of Rugeley power station will be, it can be changed into an opportunity for new homes, which we know we have to build in the Lichfield and Cannock Chase districts, and for employment? Although she has a deep love for the cooling towers, the views across from Lichfield to Cannock Chase will be improved by their removal, and greatly enhanced by low-rise industrial, commercial and housing opportunities.
I am grateful to my hon. Friend for attending this afternoon’s debate, because two of the cooling towers sit in his constituency; we share the cooling towers. He is right that there will be opportunities for homes and enterprise on the site, and later I will discuss some of those opportunities in a bit more detail.
In the short term, the closure of Rugeley B is a blow for the employees, the contractors and the wider supply chain, as well as for the local community, with many clubs and groups using facilities on the site. We cannot be complacent and assume that the area’s resilience will see us through this difficult period. We must be proactive and plan for both the short term and the long term. Of course, my first priority has been to help those people who are directly affected by the potential closure: the workforce, both employees and contractors, and the supply chain. We must ensure that they all get all the support they need at this difficult time.
To give a sense of the scale of the impact, Rugeley B has 150 employees and at least the same number of contractors from across Staffordshire and the midlands; I am pleased so many Staffordshire Members are here this afternoon. Those employees and contractors have worked at the plant for decades. Others with young families have recently bought a home. There is also the wider supply chain, which goes far beyond Rugeley. The impact of the potential closure will be felt in ports and by freight services that serve the power station, and it cannot be overestimated.
The mines and the power stations have been a central part of our local community, with Rugeley B housing facilities including a sports and social club, football and cricket pitches, and even a model railway. If the plant shuts, over the coming months we must find alternatives for the various clubs that will be affected and their 2,000 members. I call on other local community facilities and groups to come forward and offer their support to those clubs and groups that will be affected, and to rehome them, at least for the short term.
I am very glad that my hon. Friend has secured this debate, and I apologise for being a few minutes late. In my neighbouring constituency of Stafford, we face the prospect of losing sports pitches at Shugborough Hall and at Staffordshire University, because of its transfer up to Stoke, so there is a real crisis for sports facilities in the Rugeley and Stafford area.
I thank my hon. Friend for raising that issue. He is absolutely right: we are losing facilities, not only at the Rugeley B site but at Shugborough, a few miles up the road. We need to look at leisure provision across the area. One thing that we need to include in any kind of site development at Rugeley B is leisure facilities.
Since the announcement on Rugeley B, I have visited the site and met the owners and unions several times to discuss practical ways in which we can support all those affected. I will hold a jobs fair in Rugeley in June, and I encourage any members of the workforce who might be affected by the potential closure and who are seeking new employment to attend this event. A couple of weeks ago, my right hon. Friend the Secretary of State for Communities and Local Government accompanied me on a visit to the site in order to understand the situation we face, to have a tour of the site, and to understand its potential future uses and the issues that we face in realising them. I take this opportunity to thank him for his time and support.
Whether the plant closes this summer, next year, or even in a few years, it is essential that we speed up plans for Rugeley’s future, and in doing so develop and implement a strategy for the site. The same is true of other coal-fired power station sites that might face closure. We need to mitigate the loss of jobs, and create new employment opportunities for all those affected and for the wider economy.
The Rugeley B power station site is of national strategic importance, as it is unique in size, location and connectivity. It is a 374-acre brownfield site that could accommodate a range of different developments, including housing, commercial and industrial units, and a gas turbine; it could help to deliver much-needed homes, jobs and electricity. I will talk about each of these in a bit more detail shortly.
A taskforce that includes the district councils, the county council and the two local enterprise partnerships has been set up. It has held its first meeting to discuss ways of supporting the workforce during the consultation period, and to establish strategic plans for the future use of the site if the plant closes. The site is in the heart of England, and it is incredibly well connected by road and rail links. It is close to many of the major motorways and trunk roads, including the M6, the M6 toll road, the M42, the A50, the A38—I could go on. It also sits alongside the west coast main line and has its own siding. The fact that there is an Amazon fulfilment centre on the land opposite Rugeley B demonstrates how well served the location is by various transport links.
Then there is the site’s connectivity. Naturally, as a power station is situated there, the site has national grid connectivity, which means there is a strong case for using the existing infrastructure and building a gas power station, which would help to create jobs for the highly skilled workforce at Rugeley B. I also understand that fibre-optic broadband runs down the railway and along nearby canals. This connectivity crossover opens up new enterprise opportunities relating to innovation and technology.
I have been busy on my iPhone, but for good parliamentary reasons: I have just been looking up on Google Maps the exact location of the site, not that I have never been there; I have obviously made many visits to the power station. I see that, as my hon. Friend says, the site is right alongside the River Trent. As a keen narrow-boater, I suggest that she adds to her list of possibilities that of the site being a very good tourism destination for narrow-boaters in the area. As the president of the Lichfield and Hatherton Canals Restoration Trust—
My hon. Friend is absolutely right that there are also tourism opportunities, because we have not only the River Trent, but the canals and the beautiful Cannock Chase, which he referred to when talking about the views from Lichfield.
The Rugeley B power station is where roads, rail, power and technology all come together. To realise the site’s economic and regeneration opportunities, we need to develop it as quickly as possible if the plant is closed. However, before the site can be redeveloped, the plant needs to be decommissioned and demolished, the site needs to be decontaminated, and infrastructure improvements need to be made, including the creation of a new access road.
As I have said, the site presents opportunities for multiple uses, and I will take each one in turn. It is no secret that we have a housing shortage, and the Government are committed to building a million homes during this Parliament. Brownfield sites such as Rugeley B present a real opportunity to deliver some of those homes without building on green-belt land. Where Rugeley A power station used to be, in the constituency of my hon. Friend Michael Fabricant, there are many new homes. Building homes on part of the Rugeley B site would help to support the Government’s plans.
To address employment losses, the regeneration of the site will need to include significant commercial development to attract enterprise and create new jobs. In my right hon. Friend the Chancellor’s Budget in March, new enterprise zones were announced in the midlands, including in Loughborough, Leicester and, as was raised in Prime Minister’s questions only today, at Brierley Hill in Dudley. I ask my hon. Friend the Minister to support me in putting forward the case for creating a Rugeley enterprise zone.
As I mentioned, Rugeley was once at the centre of innovation in the power generation industry. I believe there is an opportunity for the site to be a new home of innovation. With the connectivity crossover of national grid and broadband infrastructure, there is an argument that the site could become home to data centres, which in turn could attract other businesses in the technology and innovation space.
The need to ensure that the site includes commercial development is important not only in creating jobs, but in filling in the gap in business rates that Cannock Chase District Council will face if the power station closes. The local council is set to lose £1 million in business rates, which represents 9% of its business rate income. Over time, this gap will be met by rates from the new Mill Green designer outlet village, which is due to be built in Cannock, and which is another good reason for people to visit Cannock Chase, but the short term looks really bleak for the council. The Labour-led council faced financial difficulties before the announcement about the power station, as it has a net deficit of £1.2 million. I am told that the power station’s closure could lead to the council cutting front-line services. Will my hon. Friend the Minister therefore consider supporting the request for transitional relief funding to help the council manage its short-term financial pressures?
Finally, there is the possibility of building a gas-fired power station on the site. The national grid infrastructure there means that it would be the ideal location. The development process for a new-build combined-cycle gas turbine includes obtaining a development consent order. Such an order is required when developments are categorised as nationally significant infrastructure projects. Engie, the owner of Rugeley B, has raised concerns with me about the length of time and costs associated with obtaining a DCO. It says that the timeframe is anywhere between 26 and 32 months. There are large up-front costs associated with the preparatory work required before an application can be submitted. If any information is missing from the application after it is submitted, the process stops and the applicant must begin the process from the start. The applicant does not have the option of providing further detail once the application is submitted. The ability to make minor design changes during the process is therefore limited. That can add to the timeline and costs of a new-build project and create delay in an application for a capacity contract.
We would all agree that the planning process must be robust and effective, but power station sites such as Rugeley B are brownfield sites where there would be no change of use from power generation. We need to make the process of applying for a DCO faster and more flexible for such sites. With my hon. Friend the Member for Lichfield, I recently met the Secretary of State for Energy and Climate Change and raised that issue. I am pleased that the Planning Inspectorate will hold a workshop for potential applicants before the end of June, with a view to explaining how they can use the pre-application process to ensure that applications are progressed as swiftly as possible once submitted. That said, will the Minister undertake a review of the DCO process to ensure that it is both robust and flexible, so that coal-fired power station sites can be speedily redeveloped into gas-fired power stations?
My hon. Friend makes an important point. There is the time it takes to decontaminate land, but there is also the cost associated with that.
Cannock Chase may be a resilient area, but Rugeley has big challenges ahead as it faces life after coal-fired power stations. We have adapted to the changing industrial landscape over the last few decades, and we face the same challenges again. The redevelopment of coal-fired power station sites such as Rugeley B provides an opportunity for such areas to play their part in delivering the Government’s priorities: encouraging enterprise, creating jobs, providing new homes and generating energy. When coal-fired power stations such as Rugeley B close, we need to prioritise their wholesale and speedy redevelopment. Given the strategic importance of the site to the west midlands and to the nation, will the Minister work with me to ensure that the plans for Rugeley B’s redevelopment are accelerated, so that the economic benefits of the site’s redevelopment can be realised?
May I start by thanking Amanda Milling for securing this timely debate? Indeed, for Scotland it could hardly be timelier, given last month’s closure of Longannet power station in Fife. That closure ended coal-fired electricity production in Scotland completely. Longannet is a landmark that is highly visible from many parts of my constituency on the other side of the River Forth. It directly employed 236 people and supported another 1,000 jobs within the supply chain. The plant was Scotland’s largest power station, capable of producing 2,400 MW of electricity for the grid, accounting for about 15% of the country’s electricity capacity. Its premature closure will inevitably leave an energy capacity gap in Scotland during peak demand, and that gap now needs to be filled.
Decommissioning will continue until December, and ScottishPower’s plans for the site are expected to be known by the end of the year. Can the Minister provide some clarity on the support and fiscal incentives that can be provided to stimulate investment in the conversion of former coal-fired power plants?
Despite the UK Government’s commitment to ending coal power by 2025, they have failed to produce the financial backing and subsidies necessary to ensure that the UK energy market undergoes a productive transition towards viable alternatives. Energy firm Carlton Power was awarded a subsidy contract by DECC to build a new 1.9 GW plant at Trafford in Greater Manchester, but it was unable to meet its start date as a result of a failure to secure financial backers. The company pinned its failure on a combination of long-term policy decisions that skewed the market and uncertainty caused by recent cuts to wind and solar subsidies.
The Government’s decision to slash the fiscal infrastructure surrounding carbon capture and storage has failed to facilitate the UK’s coal industry. A report by the Energy and Climate Change Committee earlier this year warned that the opportunity to develop CCS infrastructure in the UK by the early 2020s is likely to have been missed.
In conclusion, I echo the comments of Fergus Ewing, Minister for Business, Energy and Tourism at the Scottish Parliament. He pointed out that, with the closure of Longannet, the margin of spare capacity will get even tighter, but the Tories have put the brakes on the development of replacement capacity in Scotland; onshore and offshore wind power; and the carbon capture and storage project that would have resulted in increased low-carbon thermal generation at Peterhead. As Fergus Ewing said,
“They need an urgent rethink of their failing energy policy.”
I congratulate my hon. Friend Amanda Milling on securing this timely and important debate. I know that this subject takes up an awful lot of her time. Having been elected only last year, the last thing she wanted to find out about a few months into her new role was the closure.
That is a whole different debate. It is timely that we are discussing this issue today. Members may have seen the news earlier this week that Aberthaw power station, Wales’ largest coal-fired power station, will reduce its operating hours from
We often refer to the trilemma when discussing the pros and cons of UK energy policy, but the widespread closure of our coal-fired power stations presents its own trilemma. The first challenge is the clear impact the closures have on the communities in which the power stations are based. My hon. Friend the Member for Cannock Chase outlined that. She speaks passionately about the uncertainty facing her constituents who work at Rugeley and the distress that uncertainty inevitably causes locally and regionally.
Unfortunately I have witnessed similar scenes in my constituency. Eggborough power station, which employs almost 300 people, was on the brink of closure earlier this year—it had announced a consultation on plans to close—until its new owner, the Czech group EPH, managed to secure a contract with the grid to provide extra capacity this winter. But it is just a year’s contract. It is a stay of execution, if you like, Ms Ryan. We cannot ignore the fact that a cloud still hangs over Eggborough’s future.
By contrast, Ferrybridge power station, which is right on the border of my constituency—I know it well—was not so lucky. It was forced to close earlier this year, to the detriment of the hundreds of workers based there. If that is added into the mix with the closure of Britain’s last deep coal mine at Kellingley colliery, which is also in my constituency and which closed last year, these are unquestionably very challenging times in my part of north Yorkshire.
As well as the socioeconomic impact of the closures, we need to consider the consequences for the nation’s energy security, which is the second element of the coal trilemma. At least 2.5 GW of coal closures have been announced in recent months, in addition to the 4.9 GW announced last year. That power would otherwise be supplied to millions of homes throughout the country. By losing those units, we are diminishing the resilience of our grid and its ability to absorb unforeseen risks.
Our margin of capacity, particularly when it is cold in winter, is already worryingly low. We are also significantly reducing the number of power stations that can provide ancillary services, such as system balancing, frequency response and black start, which allows us to turn the lights back on in the event of grid paralysis or partial shutdown. In the absence of coal-fired power stations, how will we procure such essential, often under-appreciated, services in future?
Because of the technical nature of this subject, I find there is a lack of understanding of the comparative capabilities of different types of power generation. Intermittent renewables, along with nuclear, are simply technologically incapable of delivering the services I have described. The lack of nuance in consideration is leading us blindly to risk our energy security.
The third element of the coal trilemma is cost. The Minister of State, Department of Energy and Climate Change, my hon. Friend Andrea Leadsom, has rightly said on many occasions that securing electricity at the least cost to consumers is an absolute priority. We totally buy into that—it is a commitment the Conservative party made in our general election manifesto and it is one we should keep.
If we are to pursue an orderly transition away from coal, as the Government intend, it is only right that we do so in the most affordable way possible. That is why it is so important that, when we consider which technologies to promote to fill the gap left by coal, we do so on a whole-system cost basis. Such an approach more accurately reflects the costs that intermittent generators pass on to the system because they are not available all the time.
I understand that during yesterday’s meeting of the Energy and Climate Change Committee my hon. Friend the Minister of State noted that the latest analysis her Department has commissioned on whole-system costs is currently being peer reviewed and is nearing completion. I congratulate my right hon. Friend the Secretary of State for Energy and Climate Change on pushing ahead with that and urge her to make the findings available as soon as is practically possible so that they can inform the growing debate on this incredibly important issue.
We face three key challenges associated with coal coming off the grid: the socioeconomic impact, the security of supply impact, and the cost of filling the gap. On the face of it, it seems a particularly daunting task, but I am pleased to say that it is not insurmountable. Nowhere is that more vividly illustrated than at the Drax power station in my constituency—if you think you have cooling towers in your neck of the woods, Ms Ryan, there are certainly plenty more in my part of north Yorkshire.
Many Members present will be familiar with Drax. It is the largest power station in the UK and generates approximately 8% of all the UK’s electricity. Over recent years it has gone through an incredible transformation by converting and upgrading some of its generating units to use sustainably sourced compressed wood pellets instead of coal. In doing so, it has addressed the three core issues I mentioned earlier.
On socioeconomic impact, switching from coal to biomass has helped Drax to protect and secure the 850 employees who are based at the power station. It has also created new employment opportunities across the biomass supply chain, which has attracted hundreds of millions of pounds of private investment.
On security of supply, thanks to the conversion it has already undertaken, Drax has become the UK’s single largest source of renewable electricity. Around 12% of the UK’s renewable power came from Drax in 2014. Crucially, this power is not only renewable but flexible and dispatchable, like coal or gas. It is available as and when we need it and can be ramped up or down to respond to the requirements of the grid at a moment’s notice.
On costs, as I have stated often in Westminster Hall, and many times in the main Chamber, on a whole-system costs basis biomass is the cheapest and most affordable renewable technology available to us today.
I declare an interest: I live opposite the Drax power station and a small wind farm. People are taxed by the wind farm, which does not create any jobs, and very supportive of the power station, which does.
Does my hon. Friend agree that biomass makes sense, not only on a cost basis, but because the industry supports jobs in the UK in a way that some of the alternatives do not? He mentioned the many power station workers, but the whole supply chain goes all the way through our region, including to the ports, which have taken a big hit in the Humber because of the loss of coal imports. Support for biomass makes sense on so many different levels. We need Ministers to work cross-departmentally to get a proper assessment of the industry’s true value to the whole UK.
My hon. Friend is absolutely right. The regional impact on supply chain jobs is huge, not just for the ports, which are hugely important, but for rail as well. The wagons that Drax has commissioned to transport biomass—I had the great honour of launching them at the National Railway Museum—were built by a British company.
With respect to costs, we have to remember that it was the taxpayer who built these power stations right across the country under the Central Electricity Generating Board. We have already paid for these stations, so it makes absolute sense that we should—to use an unpopular phrase—sweat these assets as long as possible to ensure that we get the best possible value out of them for the taxpayer.
Reusing the existing infrastructure at a power station essentially eliminates the substantial grid connection costs and upgrade work that are associated with new builds, and that might have contributed to so few new stations being built. It also reflects the value that dispatchable power adds to the energy grid by balancing the system while the wind is not blowing and the sun is not shining—we all remember the problem with the grid last November.
Going from being western Europe’s largest coal-fired power station to being its biggest de-carbonisation project in less than three years has made Drax an incredible success story. The question is, then, how can we build on that success and, where possible, replicate it at other sites around the UK? It may be too late for Rugeley but there are other stations that could certainly benefit from conversion.
A sensible and practical solution would be to allow coal power stations to compete for Government support to convert to biomass in upcoming contract for difference auctions. The auctions could operate on a whole-system basis to allow the stations to compete on a level playing field against other renewable technologies. The biomass industry—I declare an interest as the chair of the all-party parliamentary group on biomass—is not looking for any special treatment; it just wants the opportunity to bid on a level playing field along with other technologies.
Alternatively, funding could simply be provided through the dedicated biomass pot that already exists to support biomass conversions. That pot does not currently allow bids from those who are looking to convert, only from new station builds, which are very costly. That does not seem to make a lot of sense when we already have the infrastructure with coal power stations.
I recognise that the Minister has previously indicated that £730 million has been committed to supporting less-established technologies in the CfD process through to 2020. However, research recently completed by NERA Economic Consulting and Imperial College London has shown that DECC could save consumers up to £2.2 billion by supporting biomass alongside offshore wind as part of a more cost-effective renewable energy mix.
In conclusion, I urge the Minister to work closely with his colleagues at DECC to consider how further biomass conversions could also be facilitated in the near future in the light of the significant benefits that I and my hon. Friends have outlined here today. Biomass is simply the quickest and most cost-effective way to get coal off the grid. As a nation we should look to promote its deployment further through additional station conversions while we still have a window of opportunity to do so.
It is a great pleasure to serve under your chairmanship, Ms Ryan. I would like to make two or three points in response to the very fine speech made by my hon. Friend Amanda Milling. First, I congratulate her on securing this important debate and on focusing her remarks on Rugeley B power station. It is no surprise that she has been supported by our hon. Friends the Members for Stafford (Jeremy Lefroy) and for Burton (Andrew Griffiths), and has had very vocal support from my hon. Friend Michael Fabricant and me, because we all recognise Rugeley’s importance to our local economy.
I know Rugeley and the power station well. In the days before satellite navigation, it provided a handy navigation device for those trying to find their way toward Rugeley. More seriously and importantly, it provided many jobs for local people, including my constituents in Tamworth. I join my hon. Friend the Member for Cannock Chase in her determination to hold a jobs fair to help those people who may lose their jobs in finding new, gainful employment. In our part of Staffordshire, we are lucky that new jobs are being created to fill the gap that may be left by the closure of Rugeley B.
My hon. Friend mentioned the importance of housing and the development of housing on brownfield sites. I agree with that. In our part of the west midlands we need to build some 88,000 new homes to cater for growing demand, and Rugeley B could provide part of the solution. I commend that thought to the Minister. She also mentioned the importance of local infrastructure and roads such as the M6, the M6 toll road and the A50. One road she did not mention that I think is important to the local infrastructure—my hon. Friend the Minister will know this all too well—is the A5, which runs through Leicestershire and Warwickshire into Staffordshire and up to Cannock. Part of the A5 is not dualled. If we are to build new homes on the Rugeley power station site, we need to make sure we have the infrastructure to cater for those new homes.
I hope the Minister will use all his artistry and invention to prevail on our right hon. Friend the Secretary of State for Transport to include in the next road investment strategy the development of the A5. That would help not only Rugeley but my constituents in Wall; Highways England could fix the problem it created at Wall Island. Also, residents would be able to get more effectively on to the A5 and up to Rugeley to benefit from the retail park that may be developed there.
I will conclude as I began: by congratulating my hon. Friend the Member for Cannock Chase on securing this debate. She spoke passionately and eloquently, and I trust the Minister will listen to her.
Thank you for calling me to speak, Ms Ryan. I congratulate my hon. Friend Amanda Milling on securing this debate. I know that the impact of this issue on her constituency has troubled her extremely over the past few months, and that it has been at the forefront of her mind.
I represent the south of the country, but I know what my hon. Friend is feeling. In Rochester and Strood, we had two power stations that closed: our oil-fired power station on the Isle of Grain in 2012, and the Kingsnorth coal-fired power station in 2013. Luckily for the Rochester and Strood constituency, we have been able to maintain the energy industry in that part of my constituency with gas-fired power stations. Obviously, that has been some solace to people who were able to transfer to the gas-fired industry. I support all my hon. Friends here who are encouraging us to look at the new energy markets for biomass and more gas. It is absolutely right that we look at how the old coal-fired power station sites can regenerate the new energy industry.
There has been discussion around the cooling towers and how they look to my hon. Friends’ constituents. We are waiting with bated breath in Rochester and Strood for the Grain chimney to be demolished at some point in the future, and I have been told by my hon. Friend Rebecca Harris, whose constituency is on the other side of the river, that people in Essex will be sad to see the chimney go. As a keen yachtsman, I know the chimney of Grain is often used as a navigation mark; we all know that we are not far from the Medway when we see the old chimney of the Isle of Grain.
In my constituency, the people who have worked in the power stations for a long time feel passionate about the energy industry and the skills that they have, which they want to keep up. It is absolutely right that we should be able to keep those skills and utilise them. We need to do whatever we can to encourage the decommissioned sites to change, but to stick with energy.
I am pleased my hon. Friend the Member for Cannock Chase highlighted the planning process and the need to make sure it is easy for decommissioned sites to regenerate quickly, or change the power type that they produce quickly. In my constituency—this is not a bid, I promise—I would like an Isle of Grain energy island enterprise zone for my constituents, but we will leave that for another time.
Constituencies in the south of England are not unlike those in the midlands. There are a lot of similarities that I have heard about today between the constituents in Rugeley and the issues around Rugeley power station, and the issues in my constituency of Rochester and Strood. We have been lucky in the sense that we, too, have seen a fall in unemployment over the past five years. It is absolutely right that commercial sites be used for the development of new houses, but with regard to our high-tech industries, we need to use the skills and expertise that are around, so that we do not lose them for ever. We still want to be able to create the jobs that we need in the midlands and the south around these sites.
My hon. Friend mentioned that Rugeley was strategically placed, and I can also say that about the peninsula in my constituency. We have always benefited from the energy industry because of our strategic position, and because we are able to feed into the grid and can supply energy to homes. I call on the Minister to support my hon. Friend in her calls for help in regenerating Rugeley, so that there will be a positive outcome for the constituents of Cannock Chase.
It is a pleasure to serve under your chairmanship, Ms Ryan. I thank Amanda Milling for obtaining a debate on this issue. Clearly, the imminent Rugeley power station closure prompted it, and I applaud her for her efforts in seeking retraining packages and jobs for staff, as well as financial aid to decontaminate the site for redevelopment. I wish her the very best in her endeavours. None the less, the Conservative Government’s commitment to a decade of austerity continues to strangle development, competition and investment in the UK’s energy sector.
There have been some excellent contributions to the debate. The hon. Member for Cannock Chase spoke extensively, passionately and eloquently about reuse of the site after demolition and decontamination. Her points were reiterated and supported by the hon. Members for Tamworth (Christopher Pincher) and for Rochester and Strood (Kelly Tolhurst); but I offer words of caution, if the hon. Lady will have them. In the constituency of Motherwell and Wishaw, which neighbours mine, we have made great use of the land that was vacated following the destruction of the Ravenscraig steelworks by a similarly right-wing Conservative Government; but our experience is that enterprise zones, houses and sports and leisure facilities are no substitute for jobs. I will focus on that and related issues.
My hon. Friend Martyn Day recounted his experience of the failure of a specific energy provider, Carlton Power, to build a power station. That was due to legislative changes, among other things, and it was frustrating to investors. My hon. Friend quoted Scotland’s Minister for Business, Energy and Tourism, and spoke about the Longannet closure, which resulted in the loss of key jobs and problems for the community.
Given that so many Staffordshire Members have spoken, I am surprised that there has been no mention of Shakespeare yet, but I am sure—[Hon. Members: “Warwickshire!”] Is it Warwickshire? That is why, then. I stand corrected. It all sounds the same to me.
As my hon. Friend the Member for Linlithgow and East Falkirk mentioned, in March, Scottish Power closed the Longannet coal-fired power station. More than 200 direct jobs and more than 1,000 in the supply chain were lost. The problems and devastation that such closures can cause to the families and communities that are all too often heavily reliant on such large power plants are evident to many in Scotland. Having seen the detrimental impact in Scotland, I sympathise with those affected by the Cannock Chase closure. Geographically based transmission charges were much to blame for the closure of Longannet, but the commitment of the Secretary of State for Climate Change and Energy to overseeing a consultation on ending unabated coal-fired power stations by 2025 doubtless played its part in both closures. As the Financial Times reported last November, the Secretary of State wants more gas plants to replace the coal plants.
What of the future of coal-fired power stations? That, after all, is what the debate is about. The shorter answer is that without carbon capture and storage alongside, they appear not to have a future in the UK. Carbon capture and storage, for anyone not familiar with it, is a technology that can currently capture about 90% of the carbon dioxide emissions produced by fossil fuels in electricity generation and industrial processes, preventing the carbon dioxide from entering the atmosphere. It is seen as essential alongside coal-fired power stations, to enable UK and world climate change targets to be met. There are working CCS plants such as Boundary dam in Canada and numerous others in the US and Norway, but the world seeks its first large-scale operational plant to further prove the viability of that rapidly advancing technology and the opportunity to improve emissions capture to above 90%, which is the current target.
The previous UK Government created a £1 billion fund to seize the opportunity to have fully functioning CCS projects in the UK. Until last year, we were set to proceed with CCS projects at the White Rose coal-fired power station in Yorkshire—in the constituency of Selby and Ainsty, I believe—and at the gas-fired power station in Peterhead in Scotland, which I was fortunate enough to work on for Shell. The Chancellor’s cancellation of the CCS funding late last year was the latest in a long line of greener and renewable energy cuts that set us yet further back on our journey to cleaner energy.
In November 2014, the BBC reported on how changes in Government energy policy were likely to increase CO2 emissions rather than reduce them, citing—my hon. Friend the Member for Linlithgow and East Falkirk mentioned a few of these—the block on solar in the countryside, the cut to the industrial solar subsidy, cuts to solar subsidy for homes, cuts to biomass subsidy, scrapping the green deal, cutting zero-carbon homes, imposing carbon tax on renewables, blocking onshore wind, increased tax on small cars, tax breaks for the oil and gas industries, cutting zero-carbon offices and support for community energy, and selling the Green Investment Bank, to name just a few changes. Ironically, those short-term savings will cost us in the long term.
The UK Committee on Climate Change told the Secretary of State that the cost of meeting the 2050 decarbonisation target will be twice as high without a carbon capture and storage programme. The CCC points out that the proposed budget to 2032 is a minimum, and suggests that the Government be prepared to do more, not less, to reduce total UK domestic carbon emissions in line with the Paris agreement objectives. The committee also noted that greater decarbonisation ambition will be needed by the European Union. In short, we need to make more reductions. For that, CCS is essential, and an urgent plan is needed for a minimum of 7 GW of clean power by 2030, together with support for industry-wide decarbonisation.
Professor Stuart Haszeldine, director of Scottish Carbon Capture and Storage, commented:
“To stay on track in the ‘high ambition coalition’ of leading nations agreed in Paris climate talks, the UK needs to do a lot more on UK electricity, and a lot more on UK low-carbon industry and low-carbon heat. But now this government is doing a lot less.”
He went on:
“There is no sign yet that facts, unbiased scientific evidence and rationality are regarded as more important than lobbying by corporations and colleagues wishing to take the UK back to the 1960s energy mix”.
That would be a retrograde step. Professor Haszeldine said there was a choice—and it is a stark one—
“between spending £40 per household in 2016 or spending £200 per household each year from 2050. We can afford it.”
The Times reported in December 2015, during the Paris climate change conference, that worldwide more than 2,400 coal-fired power stations were under construction or planned, mostly in India or China. Without CCS, that makes a mockery of the world’s climate change commitment. The UK was in prime position to have a positive effect in the ongoing reduction of the world’s coal-fired power station emissions. Given the progress made in CCS, we had the opportunity to become the world leader in large-scale CCS project design and construction, something that would have been great not only for UK businesses, but also for the world at large, as the UK would have been able to provide a substantial decrease in global CO2 emissions by providing more efficient and affordable CCS schemes, with ever-rising emissions capture figures.
We cannot discuss the future of coal-fired power stations without thinking about ethical coal mining. The UK Government’s decision to import coal, rather than investing in an export-led energy market in the UK, has had detrimental consequences on human lives and the environment. According to Government figures, nearly 4 million tonnes of Colombian coal was imported to Hunterston in North Ayrshire alone in 2013. Rogelio Ustate from the Federation of Communities Displaced by Mining in La Guajira stated:
“The coal which is used to warm your houses on cold nights is the same coal which has taken our homes from us.”
Workers face poor and dangerous working conditions in mining much of our imported coal. It is not lost on the few British miners who remain that we no longer have deep mines in the UK, as hon. Members remarked earlier. That is despite the fact that the UK has massive coal reserves to draw on, especially in Scotland. At least if we mined the coal locally it would be ethically sourced, and it would also create jobs.
I must point out the differences in policy between the UK and Scottish Governments. The UK Government have failed to provide the fiscal incentives necessary to stimulate investment in conversions of former coal-fired power stations. Despite a commitment to ending coal power by 2025, the UK Government have failed to produce the financial backing and/or incentives to enable the UK energy market to transition from its heavy reliance on fossil fuels to being the more renewables-based energy market we seek, as per our climate change targets. The Scottish Government are concerned that the UK will continue to import energy despite the vast untapped potential of the UK’s energy market, especially in Scotland. That is especially pertinent given the potential disaster of the Government’s “all your eggs in one flawed basket” energy policy, and the French and Chinese nationalised companies at Hinkley C nuclear power station.
The Scottish Government believe that we must carry out comprehensive research into the viability of the conversion of plants to carbon capture and storage. Experts deem that prospective site planners may favour sites that are already equipped with a grid connection and immediate infrastructure. As a member of the CCS advisory committee, I concur with those findings. Industrial hubs where there is power generation, and which are linked to existing CO2 transportation and storage systems and the power grid, are deemed the most likely locations to succeed.
Dr Jenifer Baxter, the head of energy and environment at the Institute of Mechanical Engineers and the lead author of the report, “Engineering the UK Electricity Gap”, said:
“The UK is facing an electricity supply crisis. As the UK population rises and with the greater use of electricity use in transport and heating, it looks almost certain that electricity demand is going to rise…However, with little or no focus on reducing electricity demand, the retirement of the majority of the UK’s aging nuclear fleet, recent proposals to phase out coal fired power stations by 2025 and the cut in renewable energy subsidies, the UK is on course to provide even less energy than it does at the moment.”
That does not bode well for energy users.
Unless we reverse the abandonment of the cleaner renewable energy incentives for the failing Hinkley C nuclear power programme, and the Government’s rash dash for gas—fracking—this country will face an energy supply crisis. We will become ever more reliant on imported energy, despite the massive resources and skills at our disposal.
The UK Government’s decision to slash the fiscal infrastructure for carbon capture and storage has failed to facilitate matters for the coal industry in Scotland and elsewhere in the UK. The Scottish Government believe that financial backing and subsidies must be put in place to give the energy market the fiscal incentives necessary to stimulate investment in coal-fired plant conversion to CCS-converted plants.
The hon. Gentleman mentioned that the proposed White Rose project would have been sited in my constituency. It would have created many thousands of jobs—not just construction jobs, but hundreds of ongoing jobs, too. I want to clarify a point: is it the Scottish Government’s policy to convert every single coal-fired power station into a CCS plant?
As other hon. Members said, some plants are more susceptible to conversion than others. As the hon. Gentleman said, it makes sense to sweat out the value of power stations that we have already paid for. It very much depends on the technology. We must evaluate whether power stations are fit for purpose on a case-by-case basis. The secret is to create a world-leading industry. We had the opportunity to do so through carbon capture and storage, which would have enabled us to sell CCS, develop it, increase it from 90% of emissions to 92%, 94% and 96%, and create an industry and a supply chain in the UK for exportation and exploitation around the world.
Ironically, the Chancellor said explicitly that his latest Budget was
“a Budget for the next generation.”
It is not, and the bleak legacy left for the next generation is nothing to be proud of—skills shortages; a lack of research, development and innovation; and the wider economic implications of the UK having an import-led energy sector. Those are the results of the Government’s complete mishandling of energy. The failure to seize the opportunity that carbon capture and storage presents to the UK and rest of the world for managing the effects of the continued use of coal-fired power will sound the death knell for coal-fired power in the UK. That missed opportunity is one more failure in the long list of the Government’s energy policy failures. It will create a toxic financial legacy, which will be a problem for future generations.
I would like to congratulate Amanda Milling three times. First, I congratulate her on securing this important debate on the future of coal-fired power stations. Secondly, although I would not like it to be thought that I have an unhealthy interest in her website, I congratulate her on her hard work on the future of the Rugeley site—not just on whether it continues as a coal-fired power station, but on the other possible uses for the site, including conversion to a gas-fired power station.
Thirdly, I congratulate the hon. Lady on bringing to the debate an interesting category dilemma. I am responding as a member of the shadow Energy and Climate Change team, and the distinguished Minister represents the Department for Communities and Local Government, so between us we may be able to provide a complete landscape of discussion in response to her concerns. I will concentrate particularly on the energy issues and the future not just of Rugeley but of coal-fired power stations across the UK.
As the hon. Member for Coatbridge and—
I will get the entire title of the hon. Gentleman’s constituency right one day. He will have to forgive me for not getting the various parts entirely correct. As he said, coal-fired power stations in this country will not have a future unless there is a clear programme accompanying their development to capture 90% of their emissions through CCS.
It was with considerable regret that we saw the termination of the UK’s two potentially world-beating pilot projects for comprehensive CCS; among other things, they would have paved the way for a much more widespread implementation of CCS for new and existing power stations across the country. I do not think that the route to CCS in this country is dead, although I was sad that the Opposition’s call for a comprehensive new CCS strategy from Government, which we made during the passage of the Energy Bill and which was supported by the Scottish National party, was not incorporated into the Bill. In the light of the termination of those projects, there is an urgent need to develop a viable new way forward for CCS, whether exclusively in this country or in collaboration with other countries, to keep alive the idea that it is possible to attach CCS to power stations in future.
I am pleased that the hon. Gentleman agrees that there should be a way forward for CCS, but does he not also agree that, although the Government funding allocation has disappeared, the industry itself could step up to the plate and drive forward a UK CCS industry?
I hope the industry will be involved in that. However, the hon. Gentleman ought to bear in mind that, although a great deal of intellectual property remains from the project that was to take place in his constituency, for example, the project itself was not at all progressed—the CCS industry in this country remains nascent, so for the industry to take on the load of developing itself to any extent over the next period seems to be quite an ask. It is therefore essential for the Government to become involved in strategising and underwriting the development of CCS. I hope that that will now be done, even if it is not at the same level of expense as in the original two projects supported by the Government.
On the future of coal-fired power stations in the UK, it is important to be clear. The proposal is to close all coal-fired power stations by 2025, which has been mentioned this afternoon. The Government have suggested that there should be a consultation leading to the closure, subject to the caveat put forward last autumn by the Secretary of State in her energy reset speech:
“we’ll only proceed if we’re confident that the shift to new gas can be achieved within these timescales.”
That is the caveat on the proposal to close all coal-fired power stations by 2025.
The estimate is that only something like 1% of our electricity will be supplied from coal by 2025 because of the closures of coal-fired power stations for various reasons, other than the Government saying that they should close by 2025—those reasons include the European large plant directive, the age of the plants, the running out of the plants, and the economics of running them. Therefore, those plants are likely to close by that date anyway. One way or another, we face the prospect of pretty much all coal-fired power stations in the UK being closed, and the hon. Member for Cannock Chase rightly raises the issue of what will happen to those sites. What should be done with all of them, not just Rugeley B power station?
A number of us can sympathise with the issue of what happens to a large site that is vacated in or around one’s own constituency. Recently, a Ford transit van plant located on the edge of my constituency closed, creating a 600-acre site. We need to think carefully about assistance for the people who have been displaced from the site by the closure, the different possible uses for the site, and the best use given its connections and how it is going to work in future. Those are all important considerations, and the hon. Lady is clearly alive to all the issues to do with what can be done with the Rugeley B site.
No other world car manufacturer is hovering in the wings, waiting to occupy the Ford site near my constituency and to build cars instead of the Ford Motor Company. However, as far as Rugeley B is concerned, the hon. Lady has looked at whether it could remain, if not as a coal-fired station, then as another form of power station. That particular line of reasoning makes considerable sense. Her suggestion is also germane to the issue of our energy mix in future years: could Rugeley B be converted into a gas-fired power station?
Like Michael Fabricant, who I am afraid is no longer in his place, I looked at Google Maps and a large National Grid gas line runs right alongside Rugeley B power station. So the question of changing the configuration of Rugeley B from coal to gas is, in principle, very doable as far as the supply of gas to the power station is concerned. The issue would be the circumstances in which any such conversion could take place. My concern is that, in particular instances, the mechanisms in this country for encouraging the development of new gas-fired power stations, assuming that we need a number of them over coming years—
Indeed, Ms Ryan, I am about to conclude my remarks, having revealed my thoughts on the idea a gas-fired power station at Rugeley. However, before I do so, I want to spend a minute on the question of whether that conversion is feasible under existing arrangements in the capacity market. At the moment, the market provides either underwriting for existing power stations to continue to supply, or the possibility of contracts for new power stations, but there does not appear to be a category within them to enable conversion to take place—certainly not in the 15-year period.
I encourage the hon. Member for Cannock Chase to talk to DECC about whether the capacity market might be amended to take account of such arrangements. A number of coal-fired power stations have been converted to gas recently in the United States, so it is technically feasible. It depends on the kind of power station. Nevertheless, it certainly makes sense—if we are to have new gas-fired power stations anyway, why not have a gas-fired power station where a coal-fired one was? We would not then have the problem of how long the gas-fired station would need to operate over the next period. If that can be done, it would be a positive addition to our fleet of power stations and might be a solution that could apply to other former coal-fired power stations.
Given that CCS technology is proven and that the hope for Government funding is not entirely lost, does the hon. Gentleman agree that Government investment in research and development and stable legislation are key to the industry confidence necessary to develop CCS in the UK?
I agree. That is something for the future that applies to the whole power sector—we need a series of stable policy bases on which to proceed with future power provision.
Finally, given the well-known interest of Nigel Adams in biomass, and his leadership of the all-party parliamentary group on biomass, he must be aware that Rugeley B was scheduled to be converted to biomass in 2012, but that the company that took over the power station decided to pull the idea. Perhaps a reopening of that interest might be appropriate, although he must also be aware of the question about contracts for difference and how they may or may not come to the aid of biomass in future, given the budgets available.
In conclusion, I encourage the hon. Lady in her pursuit of alternative uses for the Rugeley B site. If it can be given new life in a different form, that would indeed be a good outcome for the power station.
I congratulate my hon. Friend Amanda Milling on securing this important debate. In her speech she alluded to the fact that just over a week ago my right hon. Friend the Secretary of State accompanied her on an inspection of this major site, and I warmly endorse his determination to ensure that the planning system operates quickly and effectively to assist the local authority in reaching prompt decisions on any planning proposals that may come forward for the site.
I am conscious of my hon. Friend’s discussions with other Ministers and with the owners of the Rugeley B power station. She has also met members of the taskforce of local government and local enterprise partnerships, and trade union representatives, to discuss the future of the site should the power station close.
My hon. Friend has underlined the national and strategic importance of the site and the implications of its closure. She is doing what I would call a very good sales job in promoting the site as the asset that it is, given its size, location and connectivity, which make it an attractive location for redevelopment for a range of uses. Both she and my hon. Friend Michael Fabricant mentioned the site of Rugeley A power station and I am sure that lessons can be learnt from the redevelopment of that site, where there are now homes, business parks and logistics centres, which have created thousands of jobs for the local economy. As my hon. Friend the Member for Cannock Chase said, under this Conservative Government many more people in her constituency are in work and many fewer people are unemployed than was the case in 2010.
I will cover three specific areas mentioned by my hon. Friend. Before I do so, on planning issues, because of our formal role in the planning system, Ministers are not able to comment or advise on any particular planning applications, nor would we wish to fetter judgments to be made by decision makers in the future. However, I may say the following.
My hon Friend mentioned enterprise zones. We have no current plans for new enterprise zones, but we would be happy to work with her local enterprise partnerships to look at what options might exist for Rugeley. I note that Cannock Chase is covered by both the Stoke-on-Trent and Staffordshire and the Greater Birmingham and Solihull local enterprise partnerships. As part of the growth deal round three negotiations it will be for her local area to put forward a bid in relation to its priorities to secure investment for future growth. She might want to consider discussing that with her local councils and local enterprise partnerships. My Department is certainly willing to have a conversation with her and those organisations in that regard.
Consideration will also be given to local development orders, which can be used to relax planning controls for particular areas or categories of development where the impacts would be acceptable and where that would promote economic, social or environmental gains such as boosting enterprise. Bearing in mind that I am short on time, I will write to my hon. Friend to say more about how those orders can be used.
My hon. Friend also mentioned transitional relief to help with a local council’s short-term funding pressures. Before 2013, local councils could not benefit from growth in business rates because money raised from rates was returned to central Government to be redistributed, but that is no longer the case. At the moment, councils may keep up to 50% of any growth in their business rates. Before talk began of the closure of Rugeley B, the council estimated that it would retain just over £4 million of its business rates under the retention scheme in 2016-17—a 46% growth since that scheme started. Although it would lose more than £1 million in business rates income following the power station’s closure, the ability to retain income from business rates will put the local authority pretty much back where it was in terms of baseline funding.
There is a safety net: in circumstances where losses are so significant that they exceed 7.5% of the local authority’s baseline funding, the Government top the local authority back up to its baseline funding, although that is not the situation currently in my hon. Friend’s constituency. There are, though, a number of other financial support mechanisms that she may want to consider. I would like to set those out—they include the support that we are offering for brownfield development and the remediation of brownfield sites, particularly for new housing development—but I am extremely short on time, so again, I will write to her about that important issue.
My hon. Friend also raised nationally significant infrastructure planning. I recognise what she said about gas-fired power stations and conversion and that the planning regime must be robust, but it must also be flexible. As she knows, we reviewed the Planning Act 2008 in 2014 to ensure that it was still delivering a streamlined, fair and faster nationally significant infrastructure planning system. Respondents to that review felt that the system was working reasonably well but suggested some practical improvements, many of which we have implemented, including the publication of a prospectus by the Planning Inspectorate setting out help and advice to applicants before submitting an application for development consent. I also welcome the Planning Inspectorate’s intention to hold a workshop in June to ensure effective pre-application discussions, and my hon. Friend talked about how that could be beneficial to her area.
I apologise that I have been too short on time to cover in more depth some of the questions asked by my hon. Friend and others, but I assure her that I will write to her about the items that I have not been able to respond to. If the coal-fired power station she referred to closes, she can certainly come back to my Department to discuss further the challenges of that site and the development that the local area may aspire to.
I thank all hon. Members who attended the debate, and the Minister for his comments. I look forward to following up on them and going through the issues that I have raised.
In this short time, I would like to thank hon. Members, in particular my hon. Friends from Staffordshire, who were here en masse. I add my support to that of my hon. Friend Christopher Pincher for the dualling of the A5, because, as he rightly said, it affects Cannock Chase too. I thank my neighbours, my hon. Friends the Members for Lichfield (Michael Fabricant) and for Stafford (Jeremy Lefroy), who have been incredibly supportive throughout this pretty difficult time with the power station.
The debate has demonstrated that this issue affects Members from across the UK, from Martyn Day to my hon. Friend Kelly Tolhurst. I noticed that cooling towers seem to have a role as a navigation device, whether for drivers or for sailors. I want to refer specifically to my hon. Friend Nigel Adams, who has demonstrated that his constituency is the original northern powerhouse. I thank everyone for their time this afternoon.
Question put and agreed to.
That this House
has considered the future of coal-fired power station sites.