Coal firms to lose orders and jobs

The Government will be powerless to stop the loss of at least 5,000 coal jobs in Britain, according to sources in the mining and electricity industries. Measures proposed by the Commons Trade and Industry Committee this week will not prevent the annual demand from the big three coal-fired generators National Power, Power-Gen and Eastern falling […]

The Government will be powerless to stop the loss of at least 5,000 coal jobs in Britain, according to sources in the mining and electricity industries.

Measures proposed by the Commons Trade and Industry Committee this week will not prevent the annual demand from the big three coal-fired generators National Power, Power-Gen and Eastern falling by 12m tonnes a year. A senior source at one of the generators described such a drop as ‘inevitable’. A spokesman for the Institution of Mining Engineers conceded that such an estimate was ‘perfectly realistic’.

Most of the jobs are expected to go at Britain’s largest coal company, RJB Mining, which will have to close up to eight pits.

The extent of the substitution of coal-fired generation with gas-fired plant that has taken place 18GW is now either operating or under construction means the loss of demand is irreversible. Pit closures and the redundancies in the industry could double if almost 4GW extra gas-fired capacity that already has planning consent goes ahead.

This would appear to rule out any possibility of preserving 30% or more of the generation market for coal, as demanded by Richard Budge, chief executive of RJB, and Martin O’Neill, chairman of the select committee. Proposals that the Government forces the three coal-fired generators to take more coal would not help.

Options include pricing mechanisms to choke off gas plants tariffs or increased connection charges for new plants or using existing powers under the Energy Act to halt further developments on grounds of maintaining diversity of supply.

The Government must supply proposals within six weeks if it is to implement them before the extended coal contracts with the generators expire on 30 June.

Opinion page 10