The Government’s decision to extend its ban on building new gas-fired power stations until April 2000 could cost up to 3,000 jobs.
The measure, due for announcement yesterday, will halt the construction of big power plants, an industry that has employed around 2,000 people for the last five years.
Only small combined heat-and-power units and possibly waste-to-energy schemes will go ahead in the interim. The continuing moratorium on gas-fired projects was a key outcome of the Government’s energy review, announced by trade and industry Secretary Peter Mandelson. The move is designed to preserve a market in power generation for British coal of at least 20 million tonnes a year.
The main turnkey contractors for combined-cycle gas-turbine plants in the UK ABB, Siemens and Alstom all manufacture the turbines outside the UK and most of the associated job losses at these companies will be overseas. However, British subcontractors and equipment suppliers such as boilermakers will also be hit.
Horst Muenstermann, the managing director of Siemens Power Generation in the UK, said he did not expect any lay-offs among the 900-strong workforce at SPG’s operation in Newcastle, where two-thirds of the business was service related.
‘There could be implications for jobs in Germany if we have to step out of this business for two years,’ he said.
The Institution of Mechanical Engineers described the move as short-sighted, and said it was incompatible with CO2 reduction targets, which would now require ‘draconian’ steps in other sectors.
The moratorium will also hit offshore gas projects in the North Sea. A survey for the UK Offshore Operators’ Association in July predicted that such a move would delay £2bn of investment and cost 1,300 jobs.