HC Deb 14 July 2003 vol 409 cc16-7W
Mr. Jim Cunningham

To ask the Secretary of State for Trade and Industry if she will make a statement on the provision of electricity from coal fired power stations displacing power from plants that are more environmentally friendly: and what efforts are being made to encourage the use of electricity from environmentally friendly plants in the future. [123282]

Mr. Timms

[holding answer 8 July 2003]: The choice of which generating plant to use to meet their contracts with electricity suppliers is a commercial matter for the electricity generating companies.

Electricity generators face limits imposed by the environment Agency on a variety of emissions with environmental impacts. Examples of emissions limited by the Agency in this way include sulphur dioxide and oxides of nitrogen, emissions of which are generally higher from coal plant than from other types of generation.

Coal fired generation also produces higher levels of carbon dioxide emissions than most other forms of generation. The Agency does not set limits for emissions of carbon dioxide from power stations. However, a trading scheme for carbon dioxide emissions is due to be launched by the European Union in January 2005. This scheme will cover all fossil fuelled power stations and will give generators direct financial incentives to reduce carbon emissions.

Our February 2003 Energy White Paper sets out our strategy for using competitive markets to reconcile environmental considerations with the electricity needs of homes and businesses. The White Paper stated that, we will make the new trading scheme a central plank of our future emissions reduction policies, through which the traded carbon market can set a signal for the value of carbon reductions in the economy".

Although there are at present no direct incentives on electricity generators to reduce carbon emissions, we have put in place a number of other policies to encourage environmentally friendly forms of generation. The most significant of these policies are (a) the Renewables Obligation, launched in April 2002, which encourages electricity suppliers to contract for increasing quantities of power from renewable sources and (b) exemption from the climate change levy of electricity from renewable source and from good quality combined heat and power plant.

The electricity sector has made significant progress in reducing environmentally harmful emissions over the past decade. Between 1990 and 2002, its emissions of carbon dioxide fell by about 20 per cent. and between 1990 and 2001 its emissions of sulphur dioxide fell by about 73 per cent. (figures for 2002 are not yet available). By contracts, emission of carbon dioxide and sulphur dioxide from all other sources over the same periods fell by 3 per cent. and 62 per cent. respectively.

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