Long-term strategy 'is needed for coal sell-off'

PRIVATISATION of British Coal should be based on a long- term government strategy for the industry which buyers would be forced to accept, according to

Michael Clark, a Conservative member of the Trade and Industry Select Committee.

The strategy should include long-term coal contracts with the electricity generators put in place before privatisation. Alternatively, National Power and PowerGen should be asked to take a stake in the mining industry to give them an incentive to invest in new clean technologies for burning coal to secure the industry's future, he said.

Speaking at the Royal Institution, Dr Clark said it was up to the Government to solve the coal industry's immediate problems.

He warned: 'The Government must not fail to be aware of its duty to act in the national interest. If a significant proportion of the UK's coal reserves was abandoned, resulting in a major reduction of long-term energy security, the country would see this not as a commercial decision but a largely irreversible decision of historic significance for the UK.'

However, Dr Clark added that investment in clean coal technology was also needed urgently if the UK coal sector was to compete with low-sulphur imports or cleaner natural gas. 'Whereas coal will come back into its own on price alone within 10 to 15 years, the only means it has of hanging on to its current market share of power generation is through the introduction and expansion of clean coal technology,' he said.

Dr Clark, former chairman of the energy select committee, bitterly attacked the Government's failure in the past to exploit Britain's acknowledged lead in clean coal technology and demanded that it back the building of a demonstration plant.

He said coal would remain an important global fuel and that Britain's competitors were investing heavily to make the fuel more efficient and environmentally- friendly. Dr Clark said Japan spent dollars 250m a year on clean coal work and Germany dollars 100m, while the United States was spending dollars 875m over four years. At the same time British research was already being exploited overseas.

He said: 'We cannot sell our technology because we cannot demonstrate it and in due course we shall not be able to sell coal without proven advanced technology. Will we have to import technology after all the pilot plant work we have done?'

He said that no substantial assistance was coming from the privatised electricity industry. If the Government could not countenance direct aid for clean coal technology, it should consider introducing more onerous limits on emissions from power plants. This would force the generators to actively back new technology or go out of business.