Desulphurisation: Drax Power Station (Hansard, 16 February 1989)

§ The Parliamentary Under-Secretary of State, Department of Energy (Baroness Hooper)
My Lords, the Central Electricity Generating Board announced earlier this week the award of a major contract to retrofit flue gas desulphurisation equipment to the Drax coal-fired power station in Yorkshire. The contract signals the first of the expected FGD retrofits aimed at helping to meet the United Kingdom's commitment to reduce sulphur dioxide emissions from large combustion plant by 60 per cent. against 1980 levels by the year 2003 in accordance with the European Community large combustion plant directive.

§ Lord Dean of Beswick
My Lords, I am grateful, as I am sure are many other noble Lords, for the Answer that the Minister has given indicating that progress has been made. Is she aware that I have with me the press release of the CEGB regarding the letting of this contract? It states that tendering for the new FGD plant has been extremely competitive. If it were so competitive is it possible to let a further contract to the next lowest competitor based on this fact? To put forward tenders for these very large contracts is very expensive. Time wasted in putting together estimates for the next contract could well result in a much higher price for that contract than if it were considered now.

§ Baroness Hooper
My Lords, I am grateful to the noble Lord for drawing our attention to the fact that the noble Lord, Lord Marshall of Goring, announced that tendering had been very competitive and indeed that the kind of performance-related contractual arrangement involved places greater emphasis on the responsibility of the contractor. That provides a very good precedent. However, in this case it is for the industry to make the arrangements. I have no doubt that it will take note of the points raised by the noble Lord. Such arrangements should be in the best interests of its customers.

§ Lord Williams of Elvel
My Lords, is the noble Baroness aware that the Drax contract is based on a licence from Hitachi which is a Japanese company? Are we now to suppose that there is no British technology in this area which is competitive? Are we to suppose that all the future retrofits that the noble Baroness has mentioned will also be based on Japanese technology? Is this a further example of the Government's supply-side miracle?

§ Baroness Hooper
My Lords, the award was certainly made to Babcock Energy Limited, part of the FKI Babcock Group. The design is licensed from Hitachi which has constructed a number of plants currently in operation in Japan. It is therefore a proven technology. Nevertheless, I understand that there is an alternative process known as the Wellman Lord regeneration process which can be considered suitable for power stations situated close to bulk chemical plants or oil refineries. There is therefore more than one technology under consideration. However, in its choice for this contract the CEGB has relied on proven technology.

§ Lord Ezra
My Lords, the Question relates to current fossil fuel plants. Can we take it for granted that any new fossil fuel plants will need to have adequate desulphurisation processes? And following the supplementary question of the noble Lord, Lord Williams of Elvel, can we hope for prospects of British processes meeting that need?

§ Baroness Hooper
My Lords, yes. Under the terms of the directive all new stations have to be fitted with modern emission controls. Obviously, technology is improving all the time. We certainly hope that there will be increased British participation in the technology.

§ Lord Hatch of Lusby
My Lords, can the noble Baroness inform the House of the cost to the consumer of carrying out the full programme that she has announced up to the year 2003? What will be the rise in price of electricity based on this process?

§ Baroness Hooper
My Lords, the total capital cost of the 12 gigawatt retrofit programme is expected to be around £1.8 billion. With regard to the consumer, the full impact of the costs will not be felt until the end of the programme. That is at the turn of the century, some 14 years away. Nevertheless, the CEGB has been quoted as saying that the whole FGD programme may be expected to increase 294 electricity prices to the consumer by about 2 per cent. by the year 2003.

§ Lord Dean of Beswick
My Lords, finally, and very briefly, is the Minister aware that according to the press notices that I have—and I am sure that she has also—the first part will be commissioned by 1993 and final completion will take place in 1996? This seems a rather long timescale although I knew that it is a huge project. Is there any possibility of the timescale being reduced so that we can see some benefits before that date?

§ Baroness Hooper
My Lords, as I understand the terms of the contract that has been agreed, there will be advantages to the contracting company if it achieves the desired results before the 1996 deadline. But Drax is the biggest plant in Europe. It is the biggest retrofitting scheme ever in the world and it is the one therefore chosen to have the maximum effect and the longest impact.