Memorandum by the Yorkshire Coal Task
The Yorkshire Coal Task Force is an alliance
of local authorities, other elected representatives, coal producers,
trade unions and other interested parties who support the deep-mined
coal industry in the Region. We work closely with the Coalfield
Communities Campaign and the Regional Energy Forum on coal and
energy policy issues.
Although far smaller than it once was, we believe
that the UK deep-mined coal industry can and should remain an
important part of the nation's energy supplies well into the twenty-first
We are very concerned with energy policy issues
and their impact on the UK coal industry and the communities that
depend upon it. The organisation has consistently argued for a
continued role in the energy mix for UK deep-mined coal and investment
in clean coal technology. This needs to be a key element of energy
policy to ensure that our coal industry, the most efficient in
Europe, should have a viable future within tightening environmental
2. ENERGY REVIEWS
The current review of energy policy, by the
PIU as well as the inquiry by the Trade and Industry Select Committee,
indicates a willingness to look again at issues that in many aspects
have been overtaken by events. Security of supply issues relating
to the spread of fuel types and fuel sources had already moved
high up the agenda before recent world events. The Yorkshire Coal
Task Force therefore welcomes also the Government's decision to
look seriously at commercial scale demonstration plant for clean
coal in the context of reviews taking place in the UK and by the
A number of reviews of the energy options for
the UK have taken place over recent years but none have delivered
a long term future for the UK coal industry. In 1993 (DTI, Cm
2235) Government policy dealt with the period of transition from
a nationalised to a privatised coal industry. It did not offer
much for the long term and was non-committal about clean coal
technology. A Trade and Industry Select Committee report at the
time that recommended support for clean coal demonstration projects
was largely ignored. (HMSO, 12993, page 112.)
In the 1998 Energy Review (DTI, Cm 4071) some
consideration was given to security of supply issues and after
a short-lived restriction on consents for gas stations, New Electricity
Trading Arrangements and power station divestment were introduced
to try to correct market distortions. Again the Trade and Industry
Select Committee recommended assistance for clean coal demonstration
plant. Clean coal technology was only backed by the Government
as a research and development issue, although encouragement was
given (through emissions policy) to fit FGD to more power stations.
By the end of the 1990s, energy prices and markets
once again began to show the same kind of volatility that had
produced crises in the previous 30 years. The European Green Paper
has been a timely reminder that longer-term energy issues needed
to be considered again. Along with the proposals to renew state
aid to the coal industry, the European Union's attention has turned
to finding other ways of maintaining security of energy supplies
4. A CONTINUED
Investment in the energy sector and in new power
stations in particular in the UK is probably at its lowest for
many decades. Give the uncertainties of the market, the private
sector is unwilling to take long-term risks, preferring instead
to maximise the profit from assets acquired during the privatisation
process. Risk-averse companies, constrained by shareholder pressure,
are unlikely to embark on any significant investment in new energy
Fuel used by the major power producers in the
UK in the first quarter of 2001 was 5.8 per cent higher than in
the first quarter of 2000. Coal use was much higher than a year
earlier with 23.3 per cent more coal being consumed. Energy Trends
(May 2001) puts this down to higher gas prices which meant that
coal-fired generation was able to bid at lower prices than gas.
Nuclear's contribution was down 1 per cent compared with the same
quarter in the previous year. Coal's share of fuel used at 43
per cent was 6 per cent up on the previous year. Given this trend
is unlikely to be dramatically reversed in the near future it
would seem logical to invest to make coal-fired power generation
both cleaner and more efficient.
It seems apparent that gas prices have already
moved higher than predicted in Energy Paper 68 and that this trend
is likely to continue, underlining the need to secure alternative
sources of fuel at stable prices. This would mean, we would hope,
giving more serious consideration to investment in cleaner coal
technologies but also how the UK's reserves of coal can remain
available to power generators in the medium to long term.
The YCTF takes the view that recent commentaries
on the UK energy scene, such as the Scoping Note produced for
the PIU Energy Review, lay too much stress on projections which
show coal generation "likely to have only a limited role"
in the future. They also seem to take too little account of the
need to pursue issues involved in the current UK FGD programme,
(paragraph 19 of the PIU Scoping Note). It is an important part
of Government policy and the activities of the generators in their
efforts to reduce sulphur emissions. There is a strong case for
incentives for FGD stations to be prioritised as the market mechanism
in the UK is not likely to achieve this. Further FGD does not
of course help with CO2 but is important in reducing sulphur emissions.
5. CLEANER COAL
It is disappointing that the potential importance
of investment in cleaner coal technologies seems to have been
down-played in the current PIU Energy Review Scoping Note, though
the parallel DTI review of the case for demonstration plant holds
out hope for movement in this area. The Scoping Note does mention
clean coal technology initiatives but does not point out that
this is confined to a relatively small research and development
programme of about £4 million a year. There were strong indications
from Government Ministers before the last election on new initiatives
on clean coal technology. We would hope these indications could
be turned into a programme of action to include the construction
of at least one, if not more, demonstration power plants.
The current DTI review of the case for cleaner
coal technology demonstration plant is welcomed, especially the
proposal that it should be tied in with the Energy Review. We
would be concerned, however, if firm conclusions were to be made
by the Energy Review before the Cleaner Coal Demonstration Plant
consultation is concluded. We would also hope that the CCDP review
should actually recommend support for investment in cleaner coal
demonstration plant, although this can not be guaranteed.
6. BEYOND RESEARCH
There has been extensive research on cleaner
coal technologies carried out all over the world over the last
few decades. Much of it has originated in the UK. It is now appropriate
that we make use of such technological progress in the UK to build
actual pilot schemes to demonstrate the effectiveness of the new
technologies. The experience of cleaner coal power stations operating
in other countries needs to be assessed, but there is enough expertise
to press forward with a programme of demonstration plants in the
UK. This would also give an important boost to the export of these
technologies to major coal using countries such as China and India.
Although the capital costs of building clean coal plant, such
as those using coal gasification, are higher than for CCGTs using
natural gas, these costs are coming down. The construction of
such plants would, however, need some pump-priming either directly
from Government or as part of a levy on the electricity consumer.
Incentives in some form are required to construct the next generation
of clean coal technology power stations, but this investment would
bring enormous benefits in security, diversity, employment, and
One way forward could be that, when looking
at renewables and proposing incentives, clean coal technologies
could be considered as part of this "green" group, as
the beneficial impact of investment in cleaner coal technologies
on the environment could be dramatic.
7. COAL IMPORTS
One of the main problems from the point of view
of the indigenous coal industry has been the recent increase in
imported coal, with imports in the first quarter of 2001 being
68.6 per cent higher than a year earlier at 8.9 million tonnes.
This might have been taken to be a blip except figures show a
steady decline in deep-mined coal production in the UK over the
last four years. Coal is still a significant contributor to the
UK and EU energy supply, however, and the fact that it can be
produced at, or near, world market prices should warrant further
support beyond the existing subsidy arrangements and the end of
the ECSC treaty in 2002.
The EC Green Paper envisages an increase in
the amount of imported coal. This would have an adverse effect
on coal-producing member states, especially the workforce in the
industry, and on the coalfield areas. There is also the extra
impact on the environment of importing coal over long distances,
when currently most mines in the UK are located close to the coal-fired
power stations they supply. Coal from UK pits to power stations
is still delivered by rail or, in some instances, canal barge,
both thoroughly sustainable modes of transport.
One solution would be to strengthen the position
of indigenous coal, so that EU-produced coal retains its current
level of production, and imports would not reach the predicted
increase of 70 per cent in 20-30 years. This can be achieved only
if active measures are undertaken to guarantee internal markets
for indigenous coal. This will help to encourage investment and
ensure that the necessary new mines are sunk. A greater contribution
of indigenous coal to the total energy package of the UK and EU
would help to reduce dependence on other forms of imported energy.
This would have the benefits of securing internal jobs and profits,
as well as preventing coal mining communities from suffering the
deprivation seen in Britain from mass closures in the 1980s and
8. ACCESS TO
Access to reserves of coal in the EU should
be maintained, especially in the UK where they have the greatest
opportunity of being mined on a commercially competitive basis.
Mines need to be maintained in production because of the importance
of retaining skilled employees and up-to-date equipment and the
relative costs of opening new mines. Moth-balling, as is the case
with Thorne near Doncaster, at a cost of £1 million per year,
could only be considered with a small number of mines at most.
Minimum level stockpiles and reserves proposed
by the EC Green Paper for security of supply should include coal.
The member states or the EU itself could stipulate that there
must be a minimum level of coal, and a percentage of that in producing
states should be indigenous coal. This may also help to encourage
investment in new mines, by guaranteeing a demand. Agreement could
be reached through the creation of a partnership between those
member states which still produce coal and the EU itself to decide
on coal production levels within a market framework.
Energy demand is likely to increase, despite
energy efficiency measures. Gas will be imported, but no new coal
mines are being planned to replace those which will come to the
end of their "natural" life in the next decade.
More efficient coal burning could meet increases
in demand without increasing coal burn. In the UK we also have
the potential for security of supply with hundreds of years of
coal reserves, although actual economic reserves need to be established.
There may be problems of coal supply when the Selby complex comes
to the end of its accessible reserves.
Coal-fired generation currently supplies roughly
one-third of the UK energy requirements, and can respond quickly
to any crisis. We were forcibly reminded of this in 2000, when
coal burn increased to meet the demand created by a lack of electricity
from other sources eg nuclear/gas/interconnector.
Domestic use of natural gas should be prioritised.
Already Sweden has indicated an unwillingness to use gas to produce
electricity. If the use of gas for electricity generation were
to be limited, as was formerly the case, this would release more
gas for domestic use, and increase the life span of UK and EU
Research has also shown that coal liquefaction
was potentially economically viable. As oil prices rise and imports
increase, it should be considered as an option to replace conventional
oil forms when necessary.
Long-term planning to replace current facilities
(power stations, coal mines, etc) is not being done, and needs
to be integrated. North Sea oil and gas reserves are likely to
be depleted within the next 20 yearsurgent planning needs
to be undertaken to ensure that when that time comes, we have
enough and suitable power generation, and are not dependent on
imports. With the lead time for building such plant, time-scales
need to be considered, and to be treated as a matter of urgency.
The UK has by far the most competitive coal
industry in the EU, but EU coal as a whole is considered to be
"uncompetitive" compared to imported coal according
to the EC Green Paper. A strong case needs to be made within the
EU that the most competitive coal capacity in Europe needs to
be kept available for the sake, not just of UK security and diversity
of supply, but that of the rest of the EU as well.
Other factors need to be considered, such as
the social and economic impact of reducing coal mines from the
current level; the consistent quality of UK coal compared to imported
coal; the impact on the environment of transporting coal from
outside EU, also moving it across the EU. Safety of the workforce,
working conditions, the care of the environment which UK and other
EU producers demonstrate should be balanced against the price
factor of imported coal.
11. COAL INDUSTRY
The setting up of the Coalfield Task Force in
1998 and its subsequent report was a welcome recognition by Government
of the disastrous effects of the sudden contraction of the UK
coal industry. The need to prevent further closures which would
cut off reserves of coal and further detract from coalfield regeneration
efforts is a priority.
Employment in deep-mining and related industry
in Yorkshire is still an important factor in the regional economy:
|Selby Complex||2,300 including Stillingfleet, Wistow, Riccall and Gascoigne Wood
|Prince of Wales||540|
|Monkton Coking Works||130
|Harworth (just outside the region)||590
|Harworth, UK Coal HQ||300
This represents over 50 per cent of coal industry employment
Other coal-related employment has not been accurately estimated
but would include numbers employed at opencast sites, coal-fired
power stations at Drax, Eggborough and Ferrybridge, transport
and mining supplies/engineering. These issues have been taken
up with the regional development agency, Yorkshire Forward, which
has helped establish a Regional Energy Forum. The recent Energy
Forum Foundation Study produced by ECOTEC states:
"As time progresses coal is highly likely to feature
in the generating mix (of the Region) and clean coal technology
is the obvious choice. Expertise retained and developed now has
a high potential future pay-off . . . it offers jobs not only
in the design and installation of plants world-wide but also offers
a way of protecting existing regional jobs in coal mining (5,000
jobs) and in coal-fired generating plant (1,000 jobs)." (ECOTEC/Yorkshire
Forward, p 31).
12. UK AND EU ENERGY
There are profits to be made by trading in energy and we
should be keeping those profits within the UK whenever possible.
Establishing a framework that will ensure a market for UK-produced
coal within the EU will ensure that jobs and profits will stay
within the EU. We cannot foresee, either, what energy demands
there may be elsewhere in the world, which may have an impact
on prices and availabilityanother reason to ensure an internal
It can be too late to implement an energy policy in order
to respond to a crisis. Every EU member state should adopt an
integrated, balanced energy policy which plans ahead for at least
30 years, taking into account all known factors for that state
(indigenous fuel sources, local needs, etc) and for the EU as
It does not necessarily follow that a decline in the coal
industry is inevitable. It is still not too late to prevent this.
This can be achieved by investment in the industry which will
be more likely if there is a guaranteed market. It is not really
possible to make the necessary long-term investments in the domestic
coal industry on the short-term contracts that have followed privatisation.
13. A SUSTAINABLE INDUSTRY
Coal's decline has not only been due to legislative changes
but also by governments allowing gas burn for electricity generation.
When looking for a minimal coal capacity to be maintained, we
need to decide how to set this level. We believe that this should
not be less than current capacity or it will not be a sustainable
industry. However, current mines have a limited life span, we
need to start planning now for the next generation of mines, also
to recruit and retain the workforce to access the reserves. Coal
also has a big advantage as a back up fuel, but we need the stockpiles
to ensure this. There are also many regional economic and social
reasons not to reduce coal production capacity from current levels.
Although the EU Green Paper considers coal mining to be a high
labour intensity industry, this is not the case in the UK, which
is very efficient in its use of its labour resources. We need
a production base to give access to our reserves, also to use
advanced technologies, but that base should be no smaller than
There is concern that a nuclear wind-down will take place
at the same time as coal mines are being closed, and existing
coal fired plant run downthis would cause a virtual energy
vacuum. There will also be an impact when EU oil production beginning
to run down, and world prices rise.
Market trends expect to see an increase in the use of gas
for electricity generation, replacing coal burn. However, gas
prices are affected by increase in oil prices and mostly out of
EU control, with inevitable dependence on countries outside the
EU. This could have a considerable negative impact if there are
any major changes or price rises, particularly with dependence
on one major supplier. This constitutes the overriding reason
to keep as much as possible of our indigenous energy resources
to retain maximum independence.
14. STATE AID
There needs to be revision of the current framework, and
transitional arrangements beyond 2002 and the end of the ECSC
treaty. We need to include transport and energy policy issues
in deciding on state aid, as well as security of energy supply.
The need to promote renewable energy versus the same investment
in cleaner coal technologies should be evaluated for their relative
environmental benefits. We should also take account of social
aspects and the possibility of being more self-sufficient in energy.
State aid policies may still be needed for the time being. A cost
benefit analysis of the closure of a coal mine versus the regeneration
measures needed to replace it in the local economy could be a
part of bringing energy, economic and regeneration policies closer
15. LONG TERM
When electricity/gas/coal were in the public sector, the
Government through the relevant boards had to invest in order
to ensure sufficient power stations, coal mines etc were available
to provide for the energy needs of the nation. Now that they are
in the private sector, there is a reluctance to invest in costly
projects with the new market-led emphasis on short-term contracts
for electricity supply. There is a "duty of care" for
Government to ensure that future energy needs will be provided
for and ensure a balance in sources of power supply.
The situation of an ageing workforce and lack of skills also
needs to be addressed; however, if the industry once again has
the reputation of being an attractive and long-term business,
it should prove easier to recruit and retain employees.
The long-term future of the industry is not only achievable
by investment in cleaner and more attractive coal-fired power
stations but also in the industrial and domestic markets. Coal
use in large-scale CHP and community heating is well established
in other countries.
In the past, closing down coal-fired power stations has been
seen as an easy option, as compared with cutting emissions from
transport for instance.
We agree that there will be, and need to be, continuing improvements
in energy efficiency and in opening up markets. Restructuring
of electricity markets, whether as EU policy or in member states,
will need policies on renewable energy and investment in a variety
of energy sources. Other factors which will have an impact will
be the possible phasing out of nuclear power, and price increases
of gas and oil. Winding down of indigenous coal industries within
the EU cannot be seen as a positive contribution, especially in
the case of the most efficient of these, the UK industry.
We note that the gross energy demand for the EU is projected
to be 11 per cent higher in 2030 than in 1998. It is interesting
to note that with a GDP expected to increase by 90 per cent, energy
prices will be de-coupled. This gives more weight to arguments
other than just pricing to be used when formulating an energy
policy and energy structure for the future.
An increase in gas consumption would increase energy dependency
and deplete UK and EU stocks more quickly. It is interesting to
note that despite an expected decline in solid fuel by 2010, according
to EC forecasts, it is then expected to increase again so that
it will be one-third higher in 2030 than it was in 1998. It would
make socio-economic sense for as large a proportion as possible
of this solid fuel to be indigenous and not imported. YCTF recommends
that coal use should at least be maintained at the current levels
with less reliance on imports.
If clean coal technology power stations, particularly using
gasification, were to be built, this might change the outlook
and forecast trends considerably. The adverse impact of closing
coal mines and the lack of new mines being sunk needs to be considered.
It may be possible for Government to undertake the capital costs
of sinking such mines, and leasing them to operators for example,
through the Coal Authority.
There are limits to the scope for an increase in energy provision
from renewable sources and we should extend support for renewables
to include other "clean" forms of energy, especially
cleaner coal technologies on a commercial scale. We see support
for renewables and cleaner coal technology deployment as complementary
rather than mutually exclusive.
Investment in cleaner coal technology power stations is likely
to have a beneficial effect on industrial competitiveness and
fuel poverty by ensuring stable electricity prices over a long
Coal can also be used in Combined Heat and Power schemes,
although the infrastructure for community heating is not extensive
in the UK compared to other countries.
With the higher costs of imported gas and oil, less heavy
reliance on these now would lead to slower depletion of stocks,
and therefore delay the time when we would rely solely on imports.
The EC Energy Green Paper, while still seeing a smaller role
for an indigenous coal industry, does point to the need for:
"Investments in energy both to replace the obsolete infrastructures
and to meet growth in demand will be necessary in the next 10
"The opportunity should be seized to promote a coherent
energy policy at the Community level." (EC Green Paper, page
The question of investment in cleaner coal technologies and
pursuing a coherent energy policy which includes a long term future
for the indigenous coal industry should be pushed to the forefront
of the debate in the reviews of UK energy policy.
As the consultative document on Cleaner Coal Demonstration
Plan (CCDP) points out:
"Given the significant reserves of coal, both in the
UK and . . . world-wide, if used in an environmentally acceptable
way, coal could (our emphasis) have a long-term role in
meeting the Government's objectives of ensuring secure, diverse
and sustainable sources of energy." (CCDP report p3)
It is the view of the Yorkshire Coal Task Force that there
is an urgent need to move from the "could" to the "shall"
in this statement and to achieve these objectives using a substantial
proportion of UK deep-mined coal. This would demand a change of
Government policy, though, as is often the case, to grasp the
nettle now may well prevent negative consequences in the longer
DTI (1993) The Prospects for CoalConclusions of
the Government's Coal Review. Cm 2235.
Trade and Industry Select Committee (1993) First Report:
British Energy Policy and the Market for Coal.
DTI (1998) Conclusions of the Review of Energy Sources
for Power Generation and Government response to fourth and fifth
Reports of the Trade and Industry Committee. Cm 4071.
ECOTEC/Yorkshire Forward (2001) Regional Energy Forum
European Commission Energy Directorate (2001) Energy Green