HC Deb 15 November 2000 vol 356 cc670-1W
Mr. Coaker

To ask the Secretary of State for Trade and Industry if he will make a statement on further measures to liberalise the energy market. [138612]

Mr. Byers

I am satisfied that the programme of reforms of the electricity market set out in the Government's 1998 White Paper is now substantially complete. I am therefore lifting the stricter consents policy on gas powered stations with immediate effect.

We considered the stricter gas consents policy necessary as it provided a breathing space for existing coal fired power stations until distortions in the electricity market were ironed out.

I recognise that the ending of the stricter gas consents policy will create a new market and new challenges for coal which is why we are putting in place an aid scheme for the industry which this morning has been approved by the European Commission.

I am aware that the end of the stricter gas consents policy is eagerly awaited by industry. New power stations are important drivers of economic growth both nationally and regionally: They bring more competition to the power generation market and so put downward pressure on electricity prices for everyone's benefit; They can provide cheap power and heat to nearby industry; They make businesses more competitive and create new investment and job opportunities around the country; and They also contribute to secure electricity supplies.

I am announcing today decisions on five power station cases which had been placed on hold during the stricter gas consents policy. These power stations are Carrington, Spalding, Fleetwood, Raventhorpe and the Isle of Grain. I am also approving the application in respect of the Langage power station.

It is important developers considering new power station proposals explore the opportunities to use combined heat and power (CHP). CHP can make a major contribution to reducing emissions as well as bringing other benefits such as increased efficiency. We will be publishing guidance to developers on this matter soon.

I have also given careful consideration to the impact of lifting the stricter consents policy on the coal industry.

The Government's policy remains that it is for the coal industry to find its own place in a competitive energy market. However it is the task of Government to help industry through a period of change. That is why we are introducing a coal subsidy scheme. This will provide the industry with transitional funding so that it is able to respond to the challenges of the new market conditions that arise from the lifting of the stricter gas consents policy.