HC Deb 24 February 1992 vol 204 cc670-1
6. Mrs. Gorman

To ask the Secretary of State for Energy if he will make a statement on the number of new independent electricity generating units since privatisation.

Mr. Wakeham

The Government welcome the strong growth of competition in generation. The first project to be developed since privatisation, at Roosecote, is already supplying electricity to the grid. Four other independent generating stations are under construction and the Government are aware of about 30 other potential independent projects.

Mrs. Gorman

I thank my right hon. Friend. I am delighted with the progress that we are making in finding new sources of electricity generation. Does my right hon. Friend agree that we should welcome the decision by the European Commission to remove its restriction on gas-fired generating stations? Does he agree that gas is better not only because it is transported through its own pipelines and therefore takes transport off the road, but because it is green-clean and thermally more efficient? In my constituency it has stimulated the introduction of three new generating plants, two of them based at oil terminals at Shell haven, where the oil industry welcomes the progress of moves towards gas and is not mounting a rearguard action against it, as the coal industry seems to be doing.

Mr. Wakeham

I welcome the introduction of gas as a fuel for power generation, but it must remain competitive with coal: that will produce the best prices for electricity consumers.

Mr. Lofthouse

The Secretary of State will undoubtedly be aware that Mr. Malcolm Edwards told the Select Committee on Energy last week that the cost of gas for generation of electricity would be about 2.7p per kilowatt hour compared with 2.2p for coal. That was similar to the evidence that the Secretary of State gave some weeks ago. To enable the House and the country to clear the matter up, will the Secretary of State tell us the correct figure? Will he consider bringing the regulator's review of purchasing policy forward from 1993?

Mr. Wakeham

I have been in the House long enough to know that it is not appropriate for me to comment on evidence given to a Select Committee until that Committee has reported. However, I am prepared to confirm that in my evidence to the Select Committee I made it clear that the regional electricity companies were obliged to purchase the most economic electricity on the market. If that be coal-fired generation, so much the better.

Mr. Hind

My right hon. Friend will be aware of widespread concern in the community that whatever fuel is chosen by the electricity producers, it should be the cleanest fuel of all. Environmental considerations must play a part. If coal is to be the choice, does my right hon. Friend agree that scrubbers are essential at coal-fired power stations and the type of coal put into them must be low in sulphur dioxide emissions?

Mr. Wakeham

My hon. Friend is absolutely right. Gas is environmentally helpful in achieving the Government's target of stabilising carbon dioxide emissions at 1990 levels by the year 2005. The Opposition policy of seeking to stabilise emissions at 1990 levels by the year 2000, while keeping the coal industry at its existing size, stopping the use of gas and phasing out nuclear electricity, is the mathematics of Bedlam—it just does not add up.

Mr. Dobson

Will the Secretary of State name to the House any allegedly independent gas-fired generating projects which do not involve investment from regional electricity companies? For example, is it not true that the Roosecote project has received a substantial amount of capital from NORWEB but that the deal has been kept secret? No one knows how big the contribution was and the price paid for the electricity is being kept secret. Should it not be transparent?

Mr. Wakeham

I believe that contracts between generators and regional electricity companies are commercially confidential, and there is no reason why they should not be—

Mr. Barron

The regulator must know the difference in price.

Mr. Wakeham

I agree with the hon. Gentleman. That information must be available to the regulator, and it is. Secondly, the licensing obligations of regional electricity companies apply to power that they buy from their affiliates as well as to power that they buy from other people.