The Energy White Paper

Large Combustion Plant Directive (LCPD)

The revised LCPD introduces emission limit values (ELVs) for coal-fired power stations from January 2008. Stations equipped with flue gas desulphurisation (FGD) achieve these limits.  Operators of non-FGD stations can opt out of the Directive, but with a very limited operating life.  Total sulphur emissions will be restricted to 585,000 tonnes per year by 2010 under the related National Emissions Ceiling Directive (NECD), with power stations expected to account for less than half of this (237,000 tonnes per year).

There are important options and interpretation issues within the LCPD on which final decisions have yet to be taken. The most critical of these is whether the UK opts for ELVs or a National Emission Reduction Plan.   The UK Government negotiated the latter option as it was thought to offer flexibility. However, the way the rules have been written, and their interpretation by DEFRA, mean that such flexibility will be non‑existent and that coal burn, specifically the burning of higher sulphur UK coals, will be severely restricted. Under a national plan, emissions would have to fall to the average for 1996‑2000, calculated as if ELVs had applied throughout that five-year period.

On the other hand, the ELV option would permit FGD stations to operate without restriction, subject to the NECD ceiling. Other stations could continue to operate, subject to the provisions of the limited life derogation. If more FGD is installed, or new clean coal power stations are built, a total coal burn of up to 50m tonnes a year could be accommodated.

DEFRA favours a national plan and, in its opinion, a plan would not allow individual stations to meet ELVs outwith the plan. This would restrict sulphur emissions from power stations to as little as 144,000 tonnes per year.  In total, a national plan could permit a coal burn of just 20m tonnes per year, with consumption of UK coal restricted to some 10m tonnes per year.

The Government agreed the UK’s NECD ceiling on the basis of the projections in DTI Energy Paper 68 dated November 2000. These projections are now outdated and coal burn at power stations has been significantly higher than anticipated in the period 2000 to 2002, averaging 47m tonnes. ELVs would permit this higher level of coal burn, particularly if more FGD were installed.

COALPRO’s view is that the EP68 projections are so outdated that they do not represent a suitable baseline against which a decision between ELVs and a national plan can be made. COALPRO is concerned that DEFRA is aiming to use the national plan route to force a reduction in coal burn in order to achieve other policy objectives, i.e. to reduce carbon dioxide (CO₂) emissions.

A national plan would effectively close off the coal option.   The UK coal industry would be almost eliminated. It makes nonsense of the Investment Aid Scheme.   Diversity of supply would be adversely affected. Security of supply would be threatened both by an increased reliance on gas and by severely restricting the operating flexibility of coal-fired power stations such that peak loads could not be met.

In summary, a National Emission Reduction Plan under the LCPD is strategically wrong for the UK.

The next stage, which we understood to be imminent, is for DEFRA to come to a decision and issue a final consultation document. It would clearly be better if minds could be changed at this stage rather than be in the position of having to challenge a ministerial decision. To this end, we put in place the following plan of action: -

1. To write to Ministers;
2. To meet with the Electricity Association as we are not certain all their generating members fully appreciate the implications and with view to them making separate representations;
3. To raise one or more Parliamentary Questions;
4. To inform DTI officials;
5. To persuade the Scottish Executive to be adamant that they prefer ELVs – a single UK approach is mandatory.

1. Letters have gone to Brian Wilson, Michael Meacher and Alun Michael. (It subsequently transpired that the responsible DEFRA Minister is now Alun Michael rather than Michael Meacher). These bring out the implications in blunt fashion.
2. Letters, and a detailed paper supporting the figures, have been sent to Peter Mason and David Wilson (responsible for energy projections) at the DTI. We have also written to Callum McCarthy, Chief Executive, Ofgem, and Neil Hirst, DTI in their capacity as Chairs of the Joint Energy Security of Supply Working Group (JESS) to bring out, again bluntly, the security of supply issues.
3. We have written to Ross Finnie, the responsible Scottish Executive Minister, in terms similar to these in the letters to UK Minster’s, but with particular emphasis on the Scottish perspective.  We also met with Scottish Power on 17^th March. They favour the ELV approach and have made representations accordingly.   They also informed us that SEPA favour ELVs, which is helpful.
4. We met with the Electricity Association on 19^th March. We were told that they now favour ELVs as opposed to a national plan and had informed DEFRA accordingly – their letter, copy of which has been received this week, confirms this action.
5. The following parliamentary question has been tabled by Mr Bill O’Brien MP – Member for Normanton: “As part of its work to implement the EU Large Combustion Plants Directive, DEFRA has recently developed a National Emission Reduction Plan with consultants Entec which shows that sulphur dioxide from ALL large combustion plant (>50MWth) must fall to between 237,511 and 269,849 tonnes, depending upon what assumptions are made. Will the Minister state what proportion of this “sulphur bubble” arises from power stations operating during the period 1996-2000? Also, what is the Minister’s estimate of the quantity of coal (both UK and imported) that could be consumed at UK power stations in 2010 given this sulphur bubble?”

In addition, The Coal Authority had met with Michael Meacher and with Sir John Harman, Chairman and Baroness Young, Chief Executive of the Environment Agency to express the industry’s concerns on the LCPD. This was extremely helpful and The Authority continues to liase with COALPRO to further our common interests in this respect.

Given that representations through DEFRA’s various consultation fora seem to have been making little progress, our objective in this approach has been to break a few pots at higher levels.   The only indication we have had of any response is that the Electricity Association have since informed us that they have heard that “the issue is on the turn”, with a decision at least being deferred. This may have something to do with Alun Michael apparently taking over responsibility for the LCPD from Michael Meacher.

This is probably the most important issue facing the industry at the moment, at least for the immediate future. We shall be watching all the spaces and will keep Members informed.

Ammonium Nitrate for Blasting

The Government has recently become concerned about the security of stocks of ammonium nitrate.   This follows the explosion at Toulouse, which caused 30 deaths, and resulting concerns that such stocks could be a target for terrorist attacks. DEFRA were commissioned to draw up new regulations as much of the greatest use of ammonium nitrate is for agriculture.

The first DEFRA draft of the regulations was not circulated to users in the extractive industries. They proposed that consignments with nitrogen content of over 28% by weight would have to come with a detonation resistance test certificate; otherwise they would be classified as explosives. There would have been an exemption only for stocks of over 500kg.

Porous ammonium nitrate used for blasting would not pass the detonation resistance test.

As a consequence, regulations related to explosives would have applied. Once they got to know about this, urgent representations were made to DEFRA by the extractive industries. The HSE were also concerned that operators might opt to use agricultural grade products for blasting.

DEFRA now appear to have recognised the problem and accept that they had not appreciated the implications for ammonium nitrate used for blasting. At a recent QNJAC meeting, DEFRA officials stated that the regulations were being redrafted. Agricultural grade product will still need a detonation resistance test certificate.   In the case of porous ammonium nitrate used for blasting however, the regulations will either give an exemption (provided need can be demonstrated) or there will be a licensing regime.

This is a matter of urgency for the Government and the revised regulations will be introduced with effect from 1 May. No further consultation is proposed. The proposed treatment of the grade of ammonium nitrate used for blasting should not cause the industry major problems. A potentially very costly situation should now be manageable.

NEW COAL AUGERING OPPORTUNITIES IN THE UK