Industry group calls for end to UK ban on power stations
The Utility Buyers' Forum (UBF) has called on the Government to ends its moratorium on the construction of gas-fired power stations to help assist industry in the run-up to the Climate Change Levy and the New Electricity Trading Arrangements (NETA).
“Free market forces should apply. The moratorium was introduced to help the coal industry and then its life-span was tied into the introduction of the new electricity structure,” Bob Spears, technical director of the UBF told edie.
The Government’s announcement that it has postponed the introduction of a new electricity structure until no earlier than autumn 2000 is one factor that has prompted UBF’s call for an end to the moratorium.
Companies buying from the electricity pool have been experiencing high prices throughout much of this year or have faced the prospect of fixed price contracts that are also at high levels. “We feel that the generators are not making it easy for buyers at the moment. The pool is being killed off [when NETA is finally introduced]” because it allows for this kind of behaviour by the generators,” said Spears.
Spears cites companies’ worries about increased energy costs arising from the introduction of the Climate Change Levy in 2001 as one of the other reasons why the association is pushing the Government to assist electricity buyers earlier rather than later.
UBF does not believe that an end to the moratorium would damage the environment and it supports the principle of incentives for the combined heat and power (CHP) and renewable energy sectors.
Friends of the Earth, while admitting that the moratorium was an attempt by the Government to protect the coal industry and not protect the environment, does see environmental benefits from the ban. “The moratorium created space for the other technologies, like CHP, to flourish,” Mark Johnston, energy campaigner for FoE, told edie. “If large-scale gas had got carried away two years ago, it would have dominated the market and new technologies, that are strategically important, would have been sidelined.”
CHP schemes have been subject to certain moratorium exemptions on the grounds that they are much more energy efficient than traditional gas-fired power stations. But some approved plants have caused industry insiders to question how committed the Government is to maintaining a rigorous definition of CHP.
In particular, the Baglan Bay CHP scheme for the Pembrokeshire coast has been of concern because its heat load is lower than its power load. Some have suggested that such a plant should, in fact, be defined as a gas-fired power station since its efficiency is not as high as a CHP plant should be capable of achieving.
For the moment, FoE supports the moratorium on large gas-fired power stations because it continues to have the potential to bolster the CHP sector. “We want to take two steps at once. We don’t just want to switch from coal to gas, but to switch from coal to CHP.”