Coal-fired Power Stations — [Joan Ryan in the Chair]

Part of the debate – in Westminster Hall at 2:57 pm on 27th April 2016.

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Photo of Nigel Adams Nigel Adams Conservative, Selby and Ainsty 2:57 pm, 27th April 2016

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 1 April next year. That is just the latest in a long line of announcements from power stations up and down the country that have decided either to downgrade their operations significantly or to close their gates completely. Such announcements inevitably have severe and wide-ranging consequences.

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.