THE CONFEDERATION OF UNITED KINGDOM COAL PRODUCERS THE UNITED KINGDOM COAL ASSOCIATION

COAL:
The Energy for Today. And Tomorrow

The Confederation of UK Coal Producers totally support the Government's commitment to develop an energy policy based on the corner-stones of diversification, security and sustainability.

Coal, together with nuclear power and gas, should be a cornerstone and equal partner in a policy which will ensure we make the best long-term use of ALL of our energy resources. Our reserves of coal remain considerable compared with the currently abundant but short-term availability of gas. New gas finds will not be in the shallow waters around our coast, and therefore will be more expensive.

The EU forecasts that by the year 2020, the UK will be reliant on foreign supplies for 48 per cent of its energy. Our gas will be supplied from less politically stable countries in the former Soviet Union, the Middle East, and North Africa.

To allow such a development is inconsistent with promoting an energy policy based on diversity, security and sustainability.

There is a growing awareness of the social and economic benefits of maintaining a viable and competitive coal industry in the UK - a coal industry, which with its vast reserves, will provide the security and sustainability the Government is striving to achieve.

Technology exists and is being used in other countries to burn coal cleanly. A similar investment now in the UK will be an investment in the future of our children, for whom energy resources will be an increasingly critical issue.

By maintaining existing markets for coal, we have sufficient reserves to last for generations to come.

But action is needed, and needed quickly, to ensure we make good use of our rich coal reserves within an integrated energy policy and environmental framework.

The measures needed to enable coal to contribute effectively to an energy policy which embraces diversification, security and sustainability, are outlined below. Support for these measures will ensure coal is an equal partner in meeting the nation's energy needs, and that Britain avoids the risk of becoming over-dependent upon one fuel for its electricity supplies.

Gerry Mousley

ACTION PLAN:

• Moratorium on Section 36 Consents: The social and economic issues surrounding the development of gas stations are being assessed by the Inspector at the Gartcosh Public Inquiry, and by the Competition directorate in Brussels following a complaint by UK coal producers. The Confederation believes no further Section 36 consents should be granted until energy policy has been determined.
• An integrated Energy and Environment Policy: The unique contribution that the UK coal industry can offer in terms of security of supply, diversity and sustainability, should be taken into account when developing policy. There must be consistency between the two major policy areas. Industry needs to understand where the goal posts are and have confidence that environmental targets will have sufficient shelf life to enable the necessary long-term investments to be made. The leapfrogging of environmental targets by the European Union, Department of the Environment, the Environment Agency, and other organisations, has unnerved industry.
• Extend coal contracts post-1998: The opening of the electricity market planned for 1998 looks set to be delayed, despite the eight-year lead time for developing the necessary IT systems. Rather than rush a botched liberalisation, existing coal contracts and associated electricity sales contracts should be extended to facilitate an orderly phased liberalisation of the market.
• Support for Clean Coal technology: The levy used to support nuclear power and the development and demonstration of renewable technologies should be redefined as a Sustainable Energy Levy and extended to incorporate the demonstration of clean coal technology. A demonstration programme of 5GW of clean coal plant by 2005 should be adopted. This would enable coal burn to be maintained at current levels whilst meeting international sulphur emission targets, and enabling the coal section to reduce its emissions of CO2 by the 20% target that Government has set.
• Rolling programme of opencast production: Opencast production at current levels is essential to maintain the market for deep mined output and to meet the quality requirements of customers. A rolling programme of opencast sites, agreed with local authorities, would enable the industry to continue at current levels and give local authorities the comfort of understanding and being part of the long term plans of the industry.