Coal news and updates

Coalition mulls retreat from coal to pass energy bill

Coal-fired power stations would be consigned to the fringes of the energy market under a plan being drawn up by the coalition to head off a potential defeat over its energy bill in the House of Lords.

Ministers fear a rebellion this month by Liberal Democrat peers demanding a 2030 decarbonisation target for the electricity sector – something the government has rejected.High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/604cc27c-30fe-11e3-b478-00144feab7de.html#ixzz2hII2hAXU

In an attempt to quell the uprising, senior coalition figures are proposing a compromise involving tougher restrictions on carbon dioxide emissions from old coal-fired power stations.

Most of Britain’s coal power stations had been expected to close by 2023 because of a European directive imposing limits on the release of sulphur dioxide and nitrogen dioxide. But some companies are expected to keep their plants open by upgrading them to filter out these gases.

Paying for upgrades could make financial sense because coal is cheap.

At present, these old power stations will not need an “emissions performance standard” (EPS) – which restricts carbon dioxide emissions – as this only applies to newly built ones.

However, the coalition is proposing to extend the EPS to old power stations in a move that would make it impossible for them to keep operating at full throttle.

As a result, coal-fired power stations which operate 24 hours a day would be confined to generating back-up energy only when supplies run low.

The idea is being pushed hard by Lord Teverson, the Lib Dem energy spokesman in the Lords.

“We want to end the loophole whereby the cost of coal is so cheap it may be worthwhile for coal to pay to comply with the European legislation and continue generating [24 hours a day] well into the future,” he said.

The coalition believes that the move could halt a rebellion on October 28 in support of a 2030 decarbonisation target being led by Lord Oxburgh, former chair of Shell.

Power giant SSE said that applying the EPS to older generators could make Britain’s looming energy crisis worse. “Additional rules are only likely to exacerbate the capacity crunch . . . and will likely add to the costs of producing energy,” it warned.

But Donna Hume, a campaigner at Friends of the earth, said old coal-fired power stations had no place in a “21st century energy system”.

Cracking down on the emissions of existing coal plants – as well as new ones – would make the UK the second western country after the US to adopt such a policy this year. President Obama announced the contentious move in June, infuriating the US coal industry.

Source: www.ft.com/intl/cms