Gas-fired power fuels competition

The battle over the future of Britain's coal mines intensified yesterday when it emerged that the Government had received nine more applications to build gas-fired power stations since April, bringing the total number of outstanding applications to 20.

Meanwhile, RJB Mining, the company which bought most of British Coal's deep mines at privatisation in 1994, said the European Commission had launched a full-scale investigation of the so-called "sweetheart" contracts between gas fired stations and regional electricity companies (RECs).

The EC had been considering a complaint by RJB made in April, which was submitted again in a revised form last month to Karel van Miert, the competition commissioner. "Our application has now been accepted for investigation by the Commission," said an RJB spokesman yesterday.

The dispute is over take-or-pay contracts signed by RECs to buy power from gas fired stations. The aim was to secure alternative energy sources to the two main privatised generators, National Power and PowerGen. The deals commit the RECs to buying the power or compensating the generating stations, many of which are joint venture companies.

RJB has claimed the prices paid for gas-fired power are much higher than for coal. The submission to the EC argued the cheapest gas generators charged 2.1p a kilowatt hour, compared with 1.6p for coal. "We've clearly got a raw deal," the spokesman said.

Professor Stephen Littlechild, the electricity regulator, has repeatedly refused to intervene in the contracts on the grounds that they promote competition in the energy market. However, RJB has complained that most gas-fired plants do not compete on price with National Power and PowerGen, because of the complexities of the wholesale electricity market, the Electricity Pool.

The plight of the coal industry has become more urgent with the flood of new applications to build gas-fired stations in the so-called dash for gas. The 20 outstanding applications with the Department of Trade and Industry, listed in a recent Parliamentary answer, together account for 7,300 megawatts of capacity, enough to displace at least five big coal generating stations.

Four of the power station applications were submitted since general election, in a further test of Labour's power policy. They include a large 880 megawatt plant at Anglesey for an independent company, Canatxx Energy Ventures and a 150MW station at Barking.

Five more applications were submitted in April, just before the election, by ScottishPower, National Power, Hydro-Electric and Eastern Group.

Despite repeated words of sympathy for the coal industry, Labour has dismayed RJB by approving three gas-fired power plants since 1 May. The biggest approval by John Battle, industry minister, was for British Petroleum's 1,200MW plant at Saltend near Hull.

Mr Battle has also declined RJB's request for a moratorium on gas-fired approvals until the outcome of a public enquiry into PowerGen's plan to convert another station at Gartcosh in Scotland from coal to gas.

Last week Mr Battle came under further pressure when RJB closed Asfordby, the new Leicestershire "super-pit", blaming geological problems. Some industry watchers have warned RJB could have to shut five of its 17 working deep mines when long-term coal contracts with the generators come up for renewal in April.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Sport
Super BowlAfter Katy Perry madness it's back to The Independent's live coverage of Super Bowl 49!
News
See what Twitter had to say about the first half of the Super Bowl
News
people
News
people
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

The super-rich now live in their own Elysium - they breathe better air, and eat better food, when they're not making beans on toast for their kids

The super-rich now live in their own Elysium

They breathe better air, eat better food, take better medicine
A generation of dropouts failed by colleges

Dropout generation failed by colleges

£800m a year wasted on students who quit courses before they graduate
Entering civilian life 'can be like going into the jungle' for returning soldiers

Homeless Veterans appeal

Entering civilian life can be like going into the jungle
Sam Taylor-Johnson: Woman on top

Sam Taylor-Johnson: Woman on top

Fifty Shades of Grey director on bringing the hit to the screen
Shazam! Story of the $1bn 'what's that song?' app

Shazam: Story of the $1bn 'what's that song?' app

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch