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.