§ Motion made, and Question proposed, That this House do now adjourn—[Mr. Alan Howarth.]12.41 am
§ Mr. Terry Patchett (Barnsley, East)
I do not intend to take up too much time on this subject. It is apparent from the lack of attendance that we are all tired.
I appeal to the Minister to reconsider the financing of the pressurised fluidised bed combustion project at Grimethorpe. I may have a strange ally in my appeal because the Prime Minister has been converted to the protection of the environment. She believes in nuclear energy, but the petition that has just been presented showed one of the problems with nuclear energy—nuclear waste. I appreciate that the Prime Minister is now concerned about acid rain and the ozone layer. The project at Grimethorpe has an answer to those problems.
An experiment has been under way for some years. It began as a joint project between West Germany and America. Each of those countries has gone its different way, but they are interested in financing further experiments. Sweden markets power stations that are suitable for the Third world and other countries. Britain leads in clean-burn technology, but we have a history of allowing good ideas to go abroad. It would be deeply regrettable if we were to allow this good idea to go abroad. My concern is shared by the chairman of British Coal, Sir Robert Haslam. In a letter to me, he said:
The joint CEGB-British Coal project, with input from the US, has been particularly successful in solving a number of outstanding problems and PSBC design studies show that the technology produces lower cost electricity than other systems for power stations below 500 MW. However, the CEGB feel they must concentrate their resources on improving the technology for the larger sets of 900 MW. Although the emerging privatised distribution companies will certainly be more interested in a smaller higher efficiency unit with short delivery times, most of these will be gas-fired unless this scheme is proved.There is at present no UK collaborator with money to invest in the next stage at Grimethorpe. We certainly cannot carry this project ourselves as we aim to break even this year and are required to produce a 10 per cent. return on capital within a highly competitive coal market. This is particularly frustrating since there now exists a potential to develop an even higher efficiency version of the PFBC called a topping cycle—a uniquely British invention. With this in mind we have an application with the Department of Energy to support a £38 million four-year programme to develop the technology.
We can all recognise, as the board does, the tremendous potential of the project. It is sad that the only response from the Secretary of State for Energy is that perhaps it is ready for private investment. Because of the confused picture on the privatisation of the electricity industry, we doubt whether private industry will show an interest at this stage.
As the Department of Energy has demanded that British Coal break even by a certain date, it has limited the finances that British Coal can invest. There is a two-edged sword hanging over the future of the fluidised bed combustion project. The Minister has had to rely on reports because he has not been to see the project. If he did, he would recognise its tremendous potential. I should be grateful if he would speak to the people working there, who will be very disappointed if the project cannot continue. Unless a funding package can be found the establishment will have to close by March 1989, with the 1159 loss of considerable expertise in advance coal combustion and the loss of the equipment and infrastructure, valued at £38 million, which support the development.
I do not think that anyone needs convincing of the tremendous potential of the project, so it is a shame that the Minister is prepared to hang back and allow the technology to go to other countries. Indeed, at some future date we might have to buy back that technology for use at power stations in this country. That is farcical.
Although we recognise the Minister's enthusiasm for nuclear energy, the amount of money required for the project is insignificant compared with that required to dispose of nuclear waste. With 200 years of coal reserves in Britain, it is farcical to proceed in such a way. We could have tremendously improved, efficient, clean-burn, coal-fired stations that could help to alleviate the problems of acid rain and damage to the ozone layer.
I ask the Minister to reconsider the matter and to find some way to fund the project—perhaps jointly between British Coal and the CEGB. For goodness sake, let us not lose this advanced technology to other countries, as has happened in the past.
§ Mr. Eric Illsley (Barnsley, Central)
I wish to support what has been said by my hon. Friend the Member for Barnsley, East (Mr. Patchett). Although the pressurised fluidised bed project is based in Grimethorpe, which is in my hon. Friend's constituency, it also affects my constituency and that of my hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay).
The project has been very successful. It is based on clean-burn technology for the burning of coal to produce electricity. The decision to withdraw funding from the project is somewhat shortsighted, not only because of the continued threat to jobs and the community in that area, but because of the mounting pressure both in Britain and throughout the world for more environmentally acceptable methods of burning fossil fuels and producing electricity. Grimethorpe has already suffered because of British Coal's past attitudes, particularly its rationalisation programme, which created job losses in the surrounding area. It is interesting that British Coal moved its Barnsley area headquarters out of the village to Allerton Bywater, 30 miles away, which also had a considerable impact on the area.
The closure of the pressurised fluidised bed project seems illogical in view of the Department of Energy's admission that cleaner coal technology is needed. We must first consider the greenhouse effect—the effect of the warming of the earth and its atmosphere, the artificial heating that will threaten polar regions, and, in future generations, the surface area that is currently at sea level.
A recent conference in Toronto drew attention to that matter. It stated that to do nothing would be the worst possible course of action. The conference would dismally regard the decision to discontinue funding for the pressurised fluidised bed project, which has achieved methods of cleanly burning fossil fuels in a manner that is acceptable to the environment lobby. As my hon. Friend the Member for Barnsley, East has mentioned, nuclear power stations will not be the answer to environment problems.
The privatisation of electricity will threaten the future of the nuclear power industry. Two research programmes 1160 have already been discontinued by the Minister's Department. The future for energy systems involves the environmentally clean burning of coal and fossil fuels. I, too, urge the Minister to consider ways of continuing funding for the pressurised fluidised bed project in Grimethorpe rather than allowing it to fall by the wayside, to be resurrected at a later date by other countries and perhaps by people in this country who will regard such technology as the way forward.
§ The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)
I begin by congratulating the hon. Member for Barnsley, East (Mr. Patchett) on raising in this brief debate the future of fluidised bed combustion technology. He has argued, as has the hon. Member for Barnsley, Central (Mr. Illsley)—I notice that the hon. Member for Barnsley, West and Penistone (Mr. McKay) is also present—the case for Government support for the continuation of a programme of work at the Grimethorpe facility in the hon. Gentleman's constituency.
Both hon. Gentlemen are right that for some years it has been clear that fluidised bed combustion offers the possibility significantly to lower nitrogen oxide emissions more than conventional methods of burning coal. There is also the added benefit that sulphur emissions can be substantially reduced by adding limestone or dolomite to the bed. There are other potential benefits in terms of the high rates of heat transfer within the fluidised bed.
With the rise in oil prices in the 1970s, the International Energy Agency understandably put forward proposals for research into oil substitutes. One such programme was the Grimethorpe project, in which the participants were the United Kingdom, represented by British Coal, the Federal Republic of West Germany, and the United States.
Contrary to much public impression, Grimethorpe is not and was never set up to be a power station. As the hon. Gentleman has probably implicitly acknowledged, it is the largest pressurised fluidised bed combustion research and development facility in the world. The British Government provided £17 million out of the eventual total project cost of £60 million. British Coal provided the balance of the United Kingdom share, together with a substantial contribution in kind.
The IEA programme was in fact almost complete when the miners' strike of March 1984 intervened and persuaded the American and German participants to transfer the facility to British Coal ownership. After the miners' strike, work continued at Grimethorpe with a £28 million programme funded by British Coal and the CEGB. The objective was to solve some of the problems already identified and to move the technology closer to the point where it could be developed commercially.
That programme was supplemented by work valued at around £10 million under contract from the United States Department of Energy and the Electric Power Research Institute, the United States utility's co-operative research and development organisation. At the end of this phase, problems relevant to the use of the technology in commercial operation were resolved, and a body of design data and information was produced which can now be used with confidence by engineering concerns wishing to develop and exploit the technology.
I wish to make two points on the future of Grimethorpe and its technology. First of all, pressurised fluidised bed 1161 combustion is only one of several ways in which coal can be used to generate electricity while at the same time meeting high environmental standards. In 1981 my Department's Advisory Council on Research and Development, ACORD, commissioned a programme to assess the economics of clean power generation by advanced coal-based combined cycles, compared with a conventional coal-fired power station with flue gas desulphurisation.
The programme was managed jointly by my Department, the CEGB, British Coal and British Gas, and embraced both gasification and fluidised bed combustion technologies. A series of design studies were undertaken by experienced engineering contractors, and the results are summarised in energy paper No. 56 published in August of this year. A copy has been placed in the Library of the House, and I arranged for a copy to be sent to the hon. Member for Barnsley, East.
The most detailed assessments were made of pressurised fluidised bed combustion, using data derived mainly from the joint British Coal and CEGB programme, and also of the gasification combined cycle plant, using information from the 500 tonnes per day British Gas-Lurgi gasifier programme at Westfield.
The conclusions of these studies indicated that, for the near term at least, none of the fluidised bed designs offered an advantage over the planned conventional 900 MW electrical pulverised coal-fired units fitted with flue gas desulphurisation and a low nitrogen oxide combustion system. It was these conclusions that caused the CEGB to look again at its involvement in the Grimthorpe project. As a result, late last year, the CEGB decided not to participate in any further programme beyond that to which it was already committed, and it withdrew from further support for the work at Grimethorpe.
A further factor in that decision may have been that an integrated gasification combined cycle plant design based on the British Gas-Lurgi slagging gasifier now shows promise of being able to compete with conventional plant with flue gas desulphurisation at sizes of current interest to the CEGB, assuming continuing improvements in gas turbine efficiency and a market for the sulphur by-product.
The first point then is that there are competing technologies to fluidised bed combustion capable of meeting and possibly improving on its performance.
§ Mr. Allen McKay (Barnsley, West and Penistone)
Taking the Minister's argument into consideration, is it not a fact that fluidised beds still have the advantage of their huge heat transference ability? That is far more beneficial to the environment than the other matters mentioned. Has it not proceeded so far that field trials should be carried out in which the Government should play a part?
§ Mr. Spicer
I agree that this technology has advantages, and I want to say how it might develop. I am not arguing that this technology does not have its applications.
1162 The second point I want to make about the future of fluidised bed combustion is that it can be conceived of as largely a proven technology. We have the technology. It is not a question of having to research into new technology. Following on from the hon. Gentleman's point, the question for the future is one of the rate at which it would be taken up commercially. It is not a question of privatisation; it is the application of the technology by whomever applies it. I certainly know of one private power company which is introducing it—I suspect very effectively —in the United States. I understand that industry in Sweden and Germany—the hon. Member for Barnsley, East mentioned Sweden—has shown a similar interest in the technology as that shown by the United States. I believe that a privatised electricity supply industry may result in similar innovations over here.
What certainly seems to be clear is that many private companies considering entry to the power generation market are thinking in terms of plant considerably smaller than those planned by the CEGB, and there may be opportunities to exploit pressurised fluidised bed combustion in that context.
Certainly the joint design studies that I have mentioned, which were sponsored by the Department, showed that at smaller plant sizes, around 400 MW electrical, the pressurised fluidised bed plant is potentially competitive with conventional coal-fired stations with emission control. However, the technology that power-generating companies choose is a matter for those companies alone, and their choice will be governed by the economics of operation and by the experience of others.
The Government's position with respect to the Grimethorpe facility is therefore clear and has been made clear on a number of occasions recently. We believe that the next stage of work is near-commercial, and that decisions on whether and in what manner the work should proceed are best taken by those who stand to benefit from its development. I am confident that the results obtained from the Grimethorpe project, which have been heavily financed with public moneys, will be of great value to any industrial organisation wishing to exploit this technology. I have already mentioned that this technology is being exploited commercially in other countries.
In summary, the Grimethorpe facility is the property and responsibility of British Coal. It is for British Coal, and for any partners that it may interest in the project, to determine whether the pay-off from continuing research at Grimethorpe will exceed the cost of doing so. However, in the meantime, technology at a certain level exists, and I believe that in a privatised industry it may be that that technology will be applied. It is therefore a matter for the owner—British Coal—to decide whether to press ahead and develop the technology.
Beyond that, I cannot give the hon. Gentleman any assurances except that I agree that it is a good technology. It is a proven technology and it is now a question of its being taken up by commercial power companies and put to the use that they think fit.
§ Question put and agreed to.
§ Adjourned accordingly at four minutes past One o'clock.