Coal-fired power generation will continue to play a major role in the UK’s energy mix for a long time to come. Around one third of the UK’s electricity is generated from coal-burn, and last winter this reached 50 per cent. Coal is a secure and long-term source of energy that is newly affordable. And clean-coal power-generation – with an important contribution from UK coal – could meet all the objectives of the government’s energy review.

But, as the protests last August at Drax power station in Yorkshire showed, coal-fired generation is still some way from meeting the environmental challenge of deep cuts in our CO2 emissions. Drax claims to be the cleanest and most efficient coal-fired power station in the UK. It is certainly the largest – the output capacity of its six generators is 4,000 megawatts – enough power to meet seven per cent of the UK’s electricity needs.

While protesters would close it down because of its massive CO2 footprint, the TUC believes that its future lies in clean-coal technology. This means refitting the turbines of the UK’s 17 coal-fired power stations (including Drax) with super-efficient boilers, and capturing the remaining carbon dioxide for underground storage.

Drax power station is currently the biggest producer of greenhouse gases in the country. Its CO2 emissions are likely to rise this year above the 21 million tonnes produced in 2005. Worse, it has apparently reduced the amount of biomass fuel it has been burning by 90 per cent since April 2006, although last year the company cut its carbon dioxide output by 450,000 tonnes by burning crops. But this strategy is now in question following changes in the renewable energy regulations for co-firing with biomass – the incentives are now much weaker.

For the TUC, coal has a crucial role, both in security of supply through our massive indigenous reserves, and in curbing our CO2 emissions. The TUC’s response to the 2006 energy review supported a ‘balanced’ energy policy, with ‘incentives for investment in all lower-carbon generation technologies, including renewables, nuclear and clean-coal, to ensure early progress in development of new generation capacity.’

While the UK burns up to 50 million tonnes of coal a year, more than half imported, we are a minnow compared with China, which burns more than two billion tonnes annually, adding another coal-fired power unit every four days. We believe that the UK needs to take the lead in clean-coal technology, not only to meet our Kyoto targets, but also clearly to secure CO2 cuts and industrial opportunities on a global scale.

Of course, tackling climate change requires action at the highest levels to meet Kyoto and domestic emissions targets, whilst also ensuring security of energy supply. The core interests of the trade union movement lie in securing future economic prosperity, and this means moving rapidly towards a low-carbon economy with direct impacts on employment and skills.
Coal is secure, affordable and long term. Clean-coal power generation with an important role for indigenous coal will meet all of the energy white paper objectives; set an environmental example to global markets, where coal-use is set to grow considerably; and offer substantial manufacturing and employment opportunities for UK industry.

This is why the TUC helped set up a clean-coal task group in Autumn 2005, a joint industry/unions/government advisory body, chaired by Dr Mike Farley, director of technology policy liaison at Mitsui Babcock. Its aims were to “identify an appropriate policy framework, and support economic instruments and regulatory framework that would progress the research, development, promotion and initiation of clean-coal burn, carbon- capture and storage technologies.”

In a succession of meetings with ministers and officials, the group argued that a diverse range of power-generation sources – including renewables, nuclear, gas and clean-coal, combined with demand reduction – was necessary to meet the energy white paper objectives. But the group concluded what was missing in government thinking was a distinctive role for clean-coal power, allied to the further development of the UK’s indigenous coal resources.

So the group focused on:

• Developing a policy framework for the successful deployment of clean-coal.
• Making the case for coal on the grounds of security of supplies and energy costs.
• Highlighting the significant emissions reductions that could be achieved.
• Employment opportunities in power-generation, mining and equipment supply.

The government’s ambition should be to maintain at least the current coal-fired generation capacity in the UK (29 GW) whilst at the same time moving the whole coal fleet to clean-coal technology and, ultimately, zero emissions. We believe that this ambition can be achieved by a combination of new build and retrofit plants, including a number of plants with carbon capture and storage (CCS), and a number of capture-ready plants. Once all of these plants have CCS fitted and operating, the CO2 savings will be at least 25 and possibly 43 million tonnes of CO2 a year, depending on which plants they displace.

Yet action is still needed by the government to remove the barriers to clean-coal power plants. The TUC welcomed the government’s decision in July 2006 to set up a coal forum, to bring together producers, coal-fired generators and other interested parties to help them find solutions to secure the long-term future of coal-fired generation and UK coal production.
But this is just a start. Urgent action is still needed to ensure the successful development of clean-coal technology in the UK. The first priority is setting the right regulatory framework under the EU’s emissions-trading scheme (ETS). The EU ETS is a crucial climate-change policy, now introduced across Europe to tackle emissions of carbon dioxide and other greenhouse gases. The scheme works on a ‘cap and trade’ basis. EU member state governments are required to set an emission cap for all installations covered by the scheme – including power stations. Each installation is allocated allowances.

The TUC has argued for sufficient long-term allowances to incentivise investment in clean-coal technology – bending our liberalised energy market to draw investment into the coal sector. But, so far, we have failed to win this argument, so that, for now, the EU ETS will continue to incentivise cleaner gas-fired power units.

Linked to this, the TUC has also argued for urgent action to establish the legal infrastructure for CO2 storage network, linking CO2 producers – at coal- and gas-fired power stations, as well as other energy-intensive plants such as steel and aluminium – with underground storage sites such as the depleted BP Miller field in the North Sea.

Indigenous coal has an essential role in securing peak electricity supplies (much greater than its average share of generation). But indigenous coal is presently sold at prices determined by long-term contracts, which are less than the delivered cost of imported coal and at levels which do not allow new investment in deep mines. Government help is also needed to facilitate new contract arrangements which reward indigenous supply, and underpin investment and employment.

And a framework for coal should include removing existing discriminatory planning guidance (‘the presumption against’), which impedes developments of new surface or deep mines.
It is important, too, to secure the incentives under the renewables obligation that have encouraged co-burning biomass crops – up to one fifth of a coal-fired power station’s fuel input can be from locally grown biomass sources.

So an early, high-level endorsement for clean-coal in Britain as part of a diverse energy mix is essential. A clear signal of the government’s intentions would trigger the clean-coal projects that will make a major contribution to our climate-change and energy targets over the next decade.