Green ambitions are built on legacy of plentiful coal

By Andrew Bounds
Published: January 29 2009 02:00

King Coal, which once powered Yorkshire's industrialisation, may have been dethroned but he is not yet dead. While hundreds of mines have closed since the end of the 1985 strike the region still has a handful of working deep mines in private hands.
The legacy of plentiful coal is a chain of giant power stations, including Drax, the UK's biggest coal-fired plant, and heavy industry such as steel and chemical production. Yorkshire produces 18 per cent of the UK's electricity but consumes just 7 per cent of it.
That means Yorkshire's 5.2m people produce 90m tonnes of carbon annually, around double the UK average and almost a sixth of the total 587m tonne output.
Cutting that is as much an opportunity as a challenge, says Tom Riordan, chief executive of Yorkshire Forward. "We were part of creating the problem so we want to be part of creating the solution," he says.
The former environment department official says the region is well placed to capitalise on the development of carbon capture and storage. Not yet available on a commercial scale, it allows greenhouse gases to be siphoned off from fossil fuels and piped to an area where they can be trapped, to prevent them heating up the atmosphere.
"We have the big producers and, very close by, the [possibility of] storage in former gasfields in the North Sea," he says.
The rising price of coal has led Hargreaves, the Durham-based minerals and logistics company, to prolong the life of its Maltby mine near Sheffield. It also imports coal to Immingham docks. The UK consumes 60m tonnes a year, two-thirds of it from overseas.
Tom Allchurch, chief executive of Doncaster-based miner ATH Resources, says coal will always be needed because it is a secure and dependable supply. By pioneering efficient "tip-washing", it has recovered and sold millions of tonnes of the mineral coal discarded on to waste tips during mining. It extracts the coal while collecting toxic chemicals such as sulphur to be burned and restoring the site to grassland within five years.
Renewable energy will also be vital. BP and DuPont have already announced a £200m biofuel plant in Hull, which would use crops brought into the port.
UK Coal, which inherited many former mines from the defunct state-run British Coal, is planning to put wind turbines on them.
It has signed a deal with Peel Energy to develop 14 wind farms that could host 54 turbines generating up to 133 MW of power.
Even that would not put miners out of business, says Mr Allchurch. "When the wind doesn't blow you need coal to back it up."
At Drax, up to £80m is being invested in the new biomass processing and co-firing facility. This, together with existing capability, will make it the largest co-firing plant in the world. It is looking to use straw from Lincolnshire, and is also proposing to build purely bio-powered generators on Humberside.
Leeds University has teamed up with the London School of Economics to establish a £5m centre for studying the effects of climate change on the economy, launched earlier this week and chaired by Sir Nicholas Stern, author of the report on the subject.
The region has already established a dummy carbon trading project ahead of the UK establishing a nationwide scheme in 2010.
Business such as Asda, the supermarket chain, Saint-Gobain, the glassmaker and Northern Foods have joined the system, which will operate on a regional basis across the private and public sector.
"Yorkshire's economy is very reliant on fossil fuels," says Richard Hall, programme director of Carbon Action Yorkshire, which runs the system. "We know carbon reductions could have a big impact on us. We want to minimise the risk and maximise the opportunity."
While 34 councils trade within a government-backed scheme, and heavy emitters such as power plants trade on a pan-European basis under European Union rules, there is no comprehensive scheme. Mr Hall says the dummy project will give Yorkshire businesses, hospitals and other public services an advantage when real trading begins. "This is practise carbon trading to gain skills. It is monopoly money. No real money will change hands yet."
One issue that needs to be settled before the mandatory national scheme begins is how to calculate an institution's carbon footprint. "We do not have a standard methodology. The government needs to provide a framework," says Mr Hall, adding that there were around 20 methods used.
Copyright The Financial Times Limited 2009