The coal lobby urged the Government this week to change the way the electricity pool operates to save its industry from extinction.
The Confederation of UK Coal Producers made its plea at a meeting with energy advisers in the Number 10 policy unit. It expects to follow this up with briefings to individual ministers.
The confederation wants bidding into the pool to reflect actual generating costs and to end the practice of ‘zero bidding’, whereby gas-fired plants with long-term offtake contracts bid in at zero to ensure they get called on to the system.
According to analysis published by the confederation last month, the practice has meant cheaper coal-fired generation has been knocked off the system at a cost of at least £50m to consumers this year and possibly £170m in 1998 99.
A source at one of the big coal-fired generators endorsed this conclusion, saying: ‘There’s no CCGT station that can match the generating cost of uncleaned-up coal burners.’
The meeting with the Number 10 advisers followed indications over the past two weeks that at least three further gas-fired power stations totalling 2,640MW would be built over the next six years.
Following the disclosure of Magnox Electric’s plan to build a 400MW unit at Wylfa in north Wales and National Power’s commitment to a 1,500MW advanced-technology plant at Staythorpe, Nottinghamshire, Entergy of the US received consent last week for a 740MW plant at Damhead Creek on the Thames.
The confederation reiterated its call for a moratorium on gas-fired developments, claiming the Entergy decision indicated that the Government prefers reducing emissions rather than securing a future for coal.