HC Deb 24 July 1989 vol 157 cc718-20
5. Mr. Lofthouse

To ask the Secretary of State for Energy what discussions he has had regarding means to offset the cost of air pollution from the burning of fossil fuel.

Mr. Parkinson

I regularly receive representations on environmental questions and discuss them with a wide range of interests.

The Government are committed to reducing acid emissions from the burning of fossil fuel and, for example, a £2 billion investment programme is planned by the electricity supply industry to meet new standards agreed with the European Community.

Mr. Lofthouse

Does the Secretary of State agree with the recent report of the Select Committee on Energy on the greenhouse effect which concluded that the nuclear industry would not have the advantage in reducing the greenhouse effect and that the Government should not overstate the nuclear argument? Does he agree that the best way forward is to find the most efficient method of burning fossil fuel? Methods are being investigated, but because of the underfunding of plants such as Grimethorpe, that investigation is unable to progress. On Thursday, the Under-Secretary of State refused to give a definite assurance that that plant would be financed. Will the Secretary of State assure the House that Grimethorpe will continue to be funded by Government money?

Mr. Parkinson

As the hon. Gentleman knows, we are trying to put together a package—I am extremely optimistic that we will succeed—of finance to keep the project active and to bring it to a successful conclusion. I cannot anticipate the outcome of my arguments and discussions with the Treasury, but I am optimistic.

We will, of course, reply to the Select Committee report, but we do not take the view that there is one answer to the greenhouse effect. We believe that the answer will be found in a variety of ways through cleaner coal burn, nuclear power and the extension of renewables—the hon. Member for Makerfield (Mr. McCartney) mentioned the burning of waste gas. We have 45 projects on the stocks and we should be producing nearly 50 MW of electricity from waste gas next year. In a variety of ways, therefore, we shall tackle the problem of the greenhouse effect. I agree with the hon. Gentleman that one such solution is cleaner coal burn.

Mr. Hannam

Does my right hon. Friend agree that one of the important future methods of reducing pollution from coal burn will be gasification? How is gasification developing and how near are we to its use?

Mr. Parkinson

We are backing research into this matter because my Department takes the view—I have said this many times—that coal is one of our most important indigenous resources. We must find cleaner ways in which to use it, and gasification is one of them.

Mr. Malcolm Bruce

Does the Secretary of State accept that when more stringent sulphur controls are imposed on nuclear power stations—the sooner it happens the better—that will encourage the burning of low sulphur coal? In those circumstances, and given the pressure on British Coal as the Minister pushes it towards privatisation, does he agree that the forced closure of many coalfields in Scotland that produced low sulphur coal has been a mistake? Will he respond, even now, to my suggestion that he should review the likely premium for low sulphur coal when full restrictions are in force? That review might, at least, salvage some of the Scottish coalfields.

Mr. Parkinson

As the hon. Gentleman knows, closures are a matter for British Coal, which examines each case in detail before arriving at its decision whether to close. I agree that low sulphur coal has a role to play, but since the vast majority of our reserves are high sulphur coal we see the flue gas desulphurisation equipment as a way of guaranteeing a continuing market for the main body of British coal.

Mr. Redmond

The Secretary of State mentioned the financial package for Grimethorpe. If that package fails, will he stand guarantor so that, irrespective of whether the package is put together, the Government will continue to ensure adequate finance?

Mr. Parkinson

I do not personally have the means to stand guarantor, but I am extremely optimistic: I find that the Treasury is inclined to listen if one has a good case and puts it sensibly. I am extremely optimistic that we shall be successful in our negotiations.

Mr. Dickens

Does my right hon. Friend agree that the power of the wind is perhaps that most ozone-friendly of all means of creating power? Although wind farms and large offshore windmills may seem commercially very unattractive at the moment, in years to come when the coal has run out, and gas oil wells have dried up, windmills may prove one of the big sources for the future.

Mr. Parkinson

My hon. Friend makes an important point. The problem with windmills is that people who are enthusiastic about the prospects of producing electricity from them hate having them anywhere near their homes. One reason why we are sponsoring three projects with the CEGB is to find out whether the public will accept large wind farms, because they are undoubtedly environmentally intrusive, even though the electricity that they produce is welcome.

Mr. Blair

Will the Secretary of State comment on the reported collapse of the Leicester combined heat and power scheme because, as the chairman of the consortium said, there would be no effective competition in electricity generation after privatisation? If that is right, is it not a fairly damning indictment not merely of the Government's environmental policy but of their privatisation proposals.?

Mr. Parkinson

It looks as though the Leicester project is not going to happen, simply because of the economics. The plain fact is that it cannot produce a project that will provide electricity at any sort of economic price. But there are many other projects with good economic prospects. I am sorry to disappoint the hon. Gentleman: there will be substantial independent generation in the future.