Power Stations (Hansard, 22 December 1997)

§ Mr. Redwood
To ask the President of the Board of Trade what estimate she has made of the relative costs of generating power(a) from coal in an old power station running at base load and (b) a new gas power station operating at peak times. [20895]

§ Mrs. Beckett
[holding answer 15 December 1997]: The Department does not produce figures regarding individual types of plant as the costs from these vary widely depending on the plant design and fuel costs. However in its report on the proposed merger between PowerGen plc and Midlands Electricity plc in April 1996, the MMC estimated the relative capital, operating and fuel costs of coal fired and open cycle gas fired plant. From these figures one can conclude that old coal fired plant operating at a 90 per cent. load factor would generate electricity at a cost of £15 per megawatt hour while new peak lopping Open Cycle Gas Fired Plant operating at a 10 per cent. load factor would generate electricity at a cost of £69 per megawatt hour.
519W

§ Mr. Redwood
To ask the President of the Board of Trade when her Department will decide its future policy on new gas-fired power stations. [21769]

§ Mrs. Beckett
This must await the outcome of the Review announced on Wednesday 3 December. A timetable will be announced shortly.

§ Mr. Andy King
To ask the President of the Board of Trade if she will announce the terms of reference for the review on the approval of new power stations which was announced by the Prime Minister on 3 December. [22263]

§ Mrs. Beckett
The Prime Minister announced in the House on 10 December 1997,Official Report, columns 1002–03 that the Government would review the long-term energy requirements of the nation and make sure that we had an energy policy consistent with a competitive industry and the long-term energy needs of the country. As part of this, a review is being undertaken into energy sources for power generation as announced on 3 December, and its terms of reference are as follows: The Review will look at medium and longer-term scenarios for the development of generating capacity and sources of fuel supply for generation, and consider the implications of high levels of dependence on any particular fuel, source of supply, transport route, or technology. It will take as its starting point trends in energy sources for power generation, especially the growing dependence on gas, taking into account the energy policy objective of secure, diverse and sustainable supplies of energy at competitive prices and, in particular, the role of coal. Account will also be taken of the objective of sustainable development (including the meeting of environmental targets), and of European and other international obligations. The Review will also consider technical factors related to the growing use of gas in generation, including:

the provision of system stability, frequency control, flexibility of response to demand of or supply variations, and ancillary security services;

the possibilities for, and likelihood of, interruption of gas supplies, the impact of such interruptions, and possible measures, such as the holding of fuel stocks, to mitigate the risks and consequences of interruption;

in respect of generators connected to regional distribution systems rather than directly to the Grid, the circumstances, if any, in which they may have an impact on the ability of the Grid operator to manage the balance of supply and demand both nationally and locally, and the significance of such impacts;

any geographical and locational factors; the implications of the siting of power stations for energy security and systems stability.
While a number of the issues covered in the Review relate principally to England and Wales, the Scottish aspects will also be covered. The Review will make recommendations to Ministers, in the light of the above considerations, as to:

(a) the energy policy considerations relevant to applications for consent under section 36 of the Electricity Act 1989 and in considering notifications under section 14 of the Energy Act 1976; and

(b) any consequences of these considerations for guidance to local authorities as respects planning applications for generating plan not subject to section 36.
Interested parties are invited to submit their representations in writing by Monday 16 February 1998. The Department reserves the right to disclose or publish any representation unless it is clearly marked "in confidence".
520W
In addition, the following arrangements will apply during the period of the Review as respects electricity generation in Great Britain: Applications under section 36 of the Electricity Act 1989 While the Review is under way, the Secretary of State proposes to defer decisions on outstanding or new applications under section 36. Notifications under section 14 of the Energy Act 1976 The Energy Act 1976 applies separate controls on the establishment of or conversion to an oil or gas-fired electricity generating station (section 14(1)), and on the making or extending or arrangements for the supply of gas to such a station (section 14(2)). During the period of the Review, the Secretary of State proposes to defer consideration of the following:

(a) notifications relating to natural gas or oil fired generating stations or natural gas supply arrangements, where the decision on the related section 36 application is deferred or the application has not been made;

(b) notifications relating to natural gas or oil fired generating stations where the station is between 10MW and 50MW capacity (stations below 10MW are exempt under an Order); and

(c) notifications relating to natural gas supply arrangements where consideration of the section 14(1) notification in respect of the natural gas fired generating station in question is deferred under (b),
and, subject to the above and any special circumstances (for example as respects the interval that has elapsed), proposes to continue to consider:

(i) notifications relating to natural gas or oil fired generating stations or natural gas supply arrangements where the section 36 consent for the station in question has been issued; and

(ii) where section 36 does not apply, notifications relating to natural gas supply arrangements where the Secretary of State has indicated that he or she does not object to the section 14(1) notification in respect of the natural gas fired generating station in question.
Applications under section 37 of the Electricity Act 1989 These applications, which relate to overhead electric lines, will generally continue to be processed during the period of the Review. However, where the application relates solely to a deferred power generation project, it is proposed to defer work such as public inquiries or related wayleave hearings where there might be a risk of incurring nugatory expenditure. Requests for exceptions The Secretary of State will be prepared to consider, on their merits, reasoned requests for exceptions to be made in particular cases. In this context, the Secretary of State would be mindful of the environmental and other benefits of combined heat and power. Power generation below 10MW Subject to powers of secondary legislation, neither section 36 of the Electricity Act 1989, nor section 14 of the Energy Act 1976 currently apply to such cases. These cases will accordingly be able to proceed as before during the period of the Review.