Earlier this year, the Public Accounts Committee warned the Government that
the necessary investment in new energy generation was not coming forward quickly
enough to ensure that conditions were made sufficiently attractive to
private investors. Day by day we witness events that support that advice.
Earlier this week, Tilbury Power station generated power
for the last time after sixty years of operation. The station, situated on the bank of the Thames, was a coal fired station which
generated enough power for the whole of Essex. Following the adoption of
the EU’s Large combustion Plant Directive, Tilbury had to close.
Initially, RWE intended to build a new state of the art coal-fired station
on the site. Alas, it was not to be. As Secretary of State for
Energy and Climate Change, Ed Miliband decreed that no new coal-fired
power stations be built unless they captured and buried all their greenhouse gases by
2025. This was a death-knell to coal-fired power generation. So
while Germany is building new coal-fired stations, the UK is investing in more
expensive methods of power generation.
Forced to ditch coal, the management at Tilbury looked at
biomass. Wood pellets sourced from the US could be brought directly to
Tilbury by ship. The management then decided: why wait? They
converted the coal station to biomass for the remainder of the operating hours
under the directive. For the last two years, Tilbury has been a substantial
provider if renewable energy.
Sadly, the construction of the new biomass plant will not now go
ahead. RWE cannot make the investment pay, so the power station will
close. The new plant would have required investment of £450m, would have
generated 870mw of electricity, and would have been the largest dedicated
biomass station in the world.
The cancellation of this project should send alarm bells ringing throughout
Government. As our coal-fired stations close we are going to be left with a deficit in
energy production. We are relying on private sector investment to fund
new energy production, but it simply isn’t coming forward soon enough.
There is rather less capital about in the world than when the climate change
agenda was dreamt up, and since the companies we are relying on are operating in
a global marketplace, we need to make sure that the environment for
investment is attractive. In the case of RWE at Tilbury it simply wasnt
So how are we going to keep the lights on? Well, the lights won't go
off but we, as consumers, will end up paying more for our electricity as we import ever more from Europe. With fuel costs being a major source of
poverty, it is the most vulnerable consumers who will end up paying the
price of climate change. The shift to renewables risks becoming a
For my part, I believe that killing off coal production was unwise.
Coal is a relatively cheap source of energy. And the emissions from
coal-fired stations are nothing compared with those generated by cars.
The climate change lobby may pride themselves that they are ridding the world
of dirty coal, but it is coming at a price that consumers will pay.