Government lifts moratorium on new gas-fired power stations

The Government is lifting its moratorium on new gas-fired power stations, the Secretary of State for Trade and Industry, Stephen Byers, announced on 15 November.

Combined with the lifting of the Government’s strict consents policy, the Secretary of State has given the green light to six new combined cycle gas turbine (CCGT) power schemes in Kent, Lancashire, Lincolnshire, and Devon.

The stricter consents policy on new gas-fired power stations was introduced in October 1998 in order to ensure that existing coal-fired power stations were not driven out of the market whilst, what the Government described as “distortions in the wholesale electricity market” were being corrected (see related story).

“The Government’s policy remains that it is for the coal industry to find its own place in a competitive energy market,” said Byers. “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.”

Welcoming the news, Philip Daubeney, Chief Executive of the Electricity Association said, “We have always believed that allowing competition and new generation to develop freely has been a key part of the industry’s success since privatisation in 1990. The electricity market has delivered substantial price cuts to domestic customers, with annual bills down by £107, on average, since 1990.”

“The New Electricity Trading Arrangements are expected to deliver further price reductions for customers in the future,” continued Daubeney. “We are pleased the Government has recognised that its programme of electricity market reforms is now substantially complete.”

The consents for the six new CCGT power stations have been given to: Kent Power Limited, for a 1,200 MW power station on the Isle of Grain in Kent; Fleetwood Power Limited (GE) for a 1,000 MW power station at Fleetwood in Lancashire; AES Partington Ltd for a 380 MW power station at Partington in Lancashire; InterGen UK Ltd for a 800 MW power station at Spalding in Lincolnshire; Wainstones Power Limited for a 1,010 MW power station at Langage, near Plymouth; and ABB Energy Power Developments Ltd for a 450 MW power station at Raventhorpe, Scunthorpe in North Lincolnshire.

“It is important developers considering new power station proposals explore the opportunities to use combined heat and power (CHP),” said Byers. “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.” Developers submitting new proposals will be expected to show that such opportunities have been thoroughly investigated in line with the new guidance.

Friends of the Earth criticised the move, saying that preference should have been given to CHP plants.

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