Ministers considering stringent measures to clean up coal power

Juliette Jowit and Tim Webb
The Guardian, Wednesday 25 February 2009

Radical plans to clean up pollution from the UK's coal plants have been drawn up by the government amid growing international pressure to curb emissions that cause climate change.
The climate secretary, Ed Miliband, is understood to have asked for a thorough review of existing plans for up to eight new coal plants - described by leading US climate scientist James Hansen as "factories of death".
Options under consideration include forcing power companies to fit carbon capture and storage (CCS) equipment - which buries the greenhouse gases - and a big increase in funding for more "demonstration plants", which would be the first to fit the technology. Such a policy would be in line with Conservative proposals to impose CCS via a cap on emissions and to fund three or more plants to be fitted with the equipment.
Miliband has asked the Treasury for billions of pounds for the new policy because energy companies have warned they cannot afford to fund the expensive, unproven technology themselves. However the Treasury is understood to be reticent about the investment, which could run to £250m-£1bn for each power plant.
Energy companies have also warned Miliband and the Department for Business, Enterprise and Regulatory Reform (DBERR) that government dithering over new coal power is putting the UK's security of energy supply at risk, as ageing stations are closed down.
Miliband has asked officials at the Department for Energy and Climate Change for a further review in an attempt to head off the funding row, said people familiar with the discussion. Until now, the government has refused to impose any deadline for CCS, and only offered to fund one demonstration plant.
Chris Smith, chairman of the Environment Agency and a former cabinet minister, said: "There is a battle going on between the Department of Energy and Climate Change and the Treasury to secure the necessary funds for as wide a range of demonstration projects as possible."
A DECC spokesman said: "We do not recognise this description of our discussions [with the Treasury]. We're determined to meet the needs of security of supply and climate change."
Miliband is said to have first acted after the watchdog Climate Change Committee called in December for all coal plants to have the technology fitted by 2025 to ensure the UK can meet its pledge to cut emissions by 80% by 2050.
Miliband asked officials to draw up policies that would deliver the committee's recommendation, the Guardian has learned. As well as suggestions for limiting emissions and backing more demonstration plants, financing options have been discussed, including UK government guarantees for loans, a levy on customer energy bills and a carbon tax. Some money is also available from the European Commission. The Conservatives have said they would fund CCS demonstrations using money raised by auctioning carbon allowances under the European Emissions Trading System.
Miliband's department will make the decision, putting him under intense personal pressure, particularly after widespread anger among environmental campaigners over January's decision to expand Heathrow airport.
The Institute for Public Policy Research thinktank said yesterday the government must ban new coal-fired power plants which have not been fitted with CCS equipment. "CCS could be a crucial technology for tackling climate change,'" it said. "It could also create new jobs supplying markets at home and abroad, which will be especially valuable during a recession."
The Environment Agency is also calling on the government not to give the go-ahead to new coal plants which are not fitted with CCS equipment. Smith, who is in contact with DECC officials about the policy discussions, said Miliband was unlikely to go this far . "The indication I get is that DECC and Ed Miliband in particular are keen to take CCS forward in a serious way," he said. "But the devil is in the detail. I would certainly want to give every encouragement to DECC to go as far as possible."
Details of the new proposals emerged as anger over new coal plants continues to generate protests against Miliband and the utility company E.ON, which has made the first application for a new plant, at Kingsnorth in Kent. International campaign groups from more than 50 developing countries this week accused the UK of being a "climate criminal" over the existing plans for unabated coal plants.
Campaigners said they would welcome a firm deadline for CCS by the early 2020s, however a more flexible life-time emissions cap for plants was rejected as "fudge".