Michael Fabricant
Main Page: Michael Fabricant (Conservative - Lichfield)Coal-fired Power Stations
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Amanda Milling
My hon. Friend will not be surprised to learn that I agree. We need to create a level playing field to allow us to compare biomass with other renewable sources, such as solar and wind. Unfortunately, as regards creating a level playing field, I fear that this debate comes too late for Rugeley B.
On a positive note, where there were once mines and Rugeley A, there are new homes, business parks and logistics centres, which have created thousands of new jobs. The change in the industrial landscape demonstrates the area’s resilience in adapting to the challenges it faces. The chairman of the Stoke-on-Trent and Staffordshire local enterprise partnership referred to the area’s resilience in a recent letter to me, citing the changes over the past few decades since the closure of the pits. Over recent years, under a Conservative-led Government, Cannock Chase has been doing well. Unemployment has fallen, with the claimant rate falling by 75% since March 2010. Apprenticeships are on the up, and new business start-ups are increasing. However, despite the local success story over the past few years, the news that Rugeley B may close this summer is a blow to all of us who live in Rugeley.
Michael Fabricant (Lichfield) (Con)
My hon. Friend mentioned Rugeley A, which happened to be in the Lichfield constituency, so I have a personal interest in this debate. Does she agree that, as tragic as the closure of Rugeley power station will be, it can be changed into an opportunity for new homes, which we know we have to build in the Lichfield and Cannock Chase districts, and for employment? Although she has a deep love for the cooling towers, the views across from Lichfield to Cannock Chase will be improved by their removal, and greatly enhanced by low-rise industrial, commercial and housing opportunities.
Amanda Milling
I am grateful to my hon. Friend for attending this afternoon’s debate, because two of the cooling towers sit in his constituency; we share the cooling towers. He is right that there will be opportunities for homes and enterprise on the site, and later I will discuss some of those opportunities in a bit more detail.
In the short term, the closure of Rugeley B is a blow for the employees, the contractors and the wider supply chain, as well as for the local community, with many clubs and groups using facilities on the site. We cannot be complacent and assume that the area’s resilience will see us through this difficult period. We must be proactive and plan for both the short term and the long term. Of course, my first priority has been to help those people who are directly affected by the potential closure: the workforce, both employees and contractors, and the supply chain. We must ensure that they all get all the support they need at this difficult time.
To give a sense of the scale of the impact, Rugeley B has 150 employees and at least the same number of contractors from across Staffordshire and the midlands; I am pleased so many Staffordshire Members are here this afternoon. Those employees and contractors have worked at the plant for decades. Others with young families have recently bought a home. There is also the wider supply chain, which goes far beyond Rugeley. The impact of the potential closure will be felt in ports and by freight services that serve the power station, and it cannot be overestimated.
The mines and the power stations have been a central part of our local community, with Rugeley B housing facilities including a sports and social club, football and cricket pitches, and even a model railway. If the plant shuts, over the coming months we must find alternatives for the various clubs that will be affected and their 2,000 members. I call on other local community facilities and groups to come forward and offer their support to those clubs and groups that will be affected, and to rehome them, at least for the short term.
Amanda Milling
I thank my hon. Friend for raising that issue. He is absolutely right: we are losing facilities, not only at the Rugeley B site but at Shugborough, a few miles up the road. We need to look at leisure provision across the area. One thing that we need to include in any kind of site development at Rugeley B is leisure facilities.
Since the announcement on Rugeley B, I have visited the site and met the owners and unions several times to discuss practical ways in which we can support all those affected. I will hold a jobs fair in Rugeley in June, and I encourage any members of the workforce who might be affected by the potential closure and who are seeking new employment to attend this event. A couple of weeks ago, my right hon. Friend the Secretary of State for Communities and Local Government accompanied me on a visit to the site, to understand the situation we face, to tour the site and to understand its potential future uses and the issues that we face in realising them. I take this opportunity to thank him for his time and support.
Whether the plant closes this summer, next year, or even in a few years, it is essential that we speed up plans for Rugeley’s future, and in doing so develop and implement a strategy for the site. The same is true of other coal-fired power station sites that might face closure. We need to mitigate the loss of jobs and create new employment opportunities for all those affected and for the wider economy.
The Rugeley B power station site is of national strategic importance, as it is unique in size, location and connectivity. It is a 374-acre brownfield site that could accommodate a range of different developments, including housing, commercial and industrial units, and a gas turbine; it could help to deliver much-needed homes, jobs and electricity. I will talk about each of these in a bit more detail shortly.
A taskforce that includes the district councils, the county council and the two local enterprise partnerships has been set up. It has held its first meeting to discuss ways of supporting the workforce during the consultation period and to establish strategic plans for the future use of the site if the plant closes. The site is in the heart of England, and it is incredibly well connected by road and rail links. It is close to many of the major motorways and trunk roads, including the M6, the M6 toll road, the M42, the A50, the A38—I could go on. It also sits alongside the west coast main line and has its own siding. The fact that there is an Amazon fulfilment centre on the land opposite Rugeley B demonstrates how well served the location is by various transport links.
Then there is the site’s connectivity. Naturally, as a power station is situated there, the site has national grid connectivity, so there is a strong case for using the existing infrastructure and building a gas power station, which would help to create jobs for the highly skilled workforce at Rugeley B. I also understand that fibre-optic broadband runs down the railway and along nearby canals. This connectivity crossover opens up new enterprise opportunities relating to innovation and technology.
Michael Fabricant
I have been busy on my iPhone, but for good parliamentary reasons: I have just been looking up on Google Maps the exact location of the site, not that I have never been there; I have obviously made many visits to the power station. I see that, as my hon. Friend says, the site is right alongside the River Trent. As a keen narrow-boater, I suggest that she adds to her list of possibilities that of the site being a very good tourism destination for narrow-boaters in the area. As the president of the Lichfield and Hatherton Canals Restoration Trust—
Michael Fabricant
Absolutely. As the president of the trust, I know that narrow-boating is becoming an important form of leisure.
Amanda Milling
I thank my hon. Friend for his hard work in looking at Google. His name came up in conversation only the other day as I went along the canal with someone from the Canal and River Trust—
Amanda Milling
My hon. Friend is absolutely right that there are also tourism opportunities, because we have not only the River Trent, but the canals and the beautiful Cannock Chase, which he referred to when talking about the views from Lichfield.
The Rugeley B power station is where roads, rail, power and technology all come together. To realise the site’s economic and regeneration opportunities, we need to develop it as quickly as possible if the plant is closed. However, before the site can be redeveloped, the plant needs to be decommissioned and demolished, the site needs to be decontaminated and infrastructure improvements need to be made, including the creation of a new access road.
As I have said, the site presents opportunities for multiple uses, and I will take each one in turn. It is no secret that we have a housing shortage, and the Government are committed to building a million homes during this Parliament. Brownfield sites such as Rugeley B present a real opportunity to deliver some of those homes without building on green-belt land. Where Rugeley A power station used to be, in the constituency of my hon. Friend the Member for Lichfield (Michael Fabricant), there are many new homes. Building homes on part of the Rugeley B site would help to support the Government’s plans.
To address employment losses, the regeneration of the site will need to include significant commercial development to attract enterprise and create new jobs. In my right hon. Friend the Chancellor’s Budget in March, new enterprise zones were announced in the midlands, including in Loughborough, Leicester and, as was raised in Prime Minister’s questions only today, at Brierley Hill in Dudley. I ask my hon. Friend the Minister to support me in putting forward the case for creating a Rugeley enterprise zone.
As I mentioned, Rugeley was once at the centre of innovation in the power generation industry. I believe there is an opportunity for the site to be a new home of innovation. With the connectivity crossover of national grid and broadband infrastructure, there is an argument that the site could become home to data centres, which in turn could attract other businesses in the technology and innovation space.
The need to ensure that the site includes commercial development is important not only in creating jobs, but in filling in the gap in business rates that Cannock Chase District Council will face if the power station closes. The local council is set to lose £1 million in business rates, which represents 9% of its business rate income. Over time, this gap will be met by rates from the new Mill Green designer outlet village, which is due to be built in Cannock, and which is another good reason for people to visit Cannock Chase, but the short term looks really bleak for the council. The Labour-led council faced financial difficulties before the announcement about the power station, as it has a net deficit of £1.2 million. I am told that the power station’s closure could lead to the council cutting front-line services. Will my hon. Friend the Minister therefore consider supporting the request for transitional relief funding to help the council manage its short-term financial pressures?
Finally, there is the possibility of building a gas-fired power station on the site. The national grid infrastructure there means that it would be the ideal location. The development process for a new-build combined-cycle gas turbine includes obtaining a development consent order. Such an order is required when developments are categorised as nationally significant infrastructure projects. Engie, the owner of Rugeley B, has raised concerns with me about the length of time and costs associated with obtaining a DCO. It says that the timeframe is anywhere between 26 and 32 months. There are large up-front costs associated with the preparatory work required before an application can be submitted. If any information is missing from the application after it is submitted, the process stops and the applicant must begin the process from the start. The applicant does not have the option of providing further detail once the application is submitted. The ability to make minor design changes during the process is therefore limited. That can add to the timeline and costs of a new-build project and create delay in an application for a capacity contract.
We would all agree that the planning process must be robust and effective, but power station sites such as Rugeley B are brownfield sites where there would be no change of use from power generation. We need to make the process of applying for a DCO faster and more flexible for such sites. With my hon. Friend the Member for Lichfield, I recently met the Secretary of State for Energy and Climate Change and raised that issue. I am pleased that the Planning Inspectorate will hold a workshop for potential applicants before the end of June, with a view to explaining how they can use the pre-application process to ensure that applications are progressed as swiftly as possible once submitted. That said, will the Minister undertake a review of the DCO process to ensure that it is both robust and flexible, so that coal-fired power station sites can be speedily redeveloped into gas-fired power stations?
Michael Fabricant
Although this is a Treasury matter, perhaps the Minister could also comment on the funds that could be made available for building on brownfield sites containing contaminated land. Some of that power station land will be contaminated.
Amanda Milling
My hon. Friend makes an important point. There is the time it takes to decontaminate land, but there is also the cost associated with that.
Cannock Chase may be a resilient area, but Rugeley has big challenges ahead as it faces life after coal-fired power stations. We have adapted to the changing industrial landscape over the last few decades, and we face the same challenges again. The redevelopment of coal-fired power station sites such as Rugeley B provides an opportunity for such areas to play their part in delivering the Government’s priorities: encouraging enterprise, creating jobs, providing new homes and generating energy. When coal-fired power stations such as Rugeley B close, we need to prioritise their wholesale and speedy redevelopment. Given the strategic importance of the site to the west midlands and to the nation, will the Minister work with me to ensure that the plans for Rugeley B’s redevelopment are accelerated, so that the economic benefits of the site’s redevelopment can be realised?
Nigel Adams (Selby and Ainsty) (Con)
I congratulate my hon. Friend the Member for Cannock Chase (Amanda Milling) on securing this timely and important debate. I know that this subject takes up an awful lot of her time. Having been elected only last year, the last thing she wanted to find out about a few months into her new role was the closure.
Nigel Adams
That is a whole different debate. It is timely that we are discussing this issue today. Members may have seen the news earlier this week that Aberthaw power station, Wales’ largest coal-fired power station, will reduce its operating hours from 1 April next year. That is just the latest in a long line of announcements from power stations up and down the country that have decided either to downgrade their operations significantly or to close their gates completely. Such announcements inevitably have severe and wide-ranging consequences.
We often refer to the trilemma when discussing the pros and cons of UK energy policy, but the widespread closure of our coal-fired power stations presents its own trilemma. The first challenge is the clear impact the closures have on the communities in which the power stations are based. My hon. Friend the Member for Cannock Chase outlined that. She speaks passionately about the uncertainty facing her constituents who work at Rugeley and the distress that uncertainty inevitably causes locally and regionally.
Unfortunately, I have witnessed similar scenes in my constituency. Eggborough power station, which employs almost 300 people, was on the brink of closure earlier this year—it had announced a consultation on plans to close—until its new owner, the Czech group EPH, managed to secure a contract with the grid to provide extra capacity this winter. But it is just a year’s contract. It is a stay of execution; we cannot ignore the fact that a cloud still hangs over Eggborough’s future.
By contrast, Ferrybridge power station, which is right on the border of my constituency—I know it well—was not so lucky. It was forced to close earlier this year, to the detriment of the hundreds of workers based there. If that is added into the mix with the closure of Britain’s last deep coal mine at Kellingley colliery, which is also in my constituency and which closed last year, these are unquestionably very challenging times in my part of north Yorkshire.
As well as the socioeconomic impact of the closures, we need to consider the consequences for the nation’s energy security, which is the second element of the coal trilemma. At least 2.5 GW of coal closures have been announced in recent months, in addition to the 4.9 GW announced last year. That power would otherwise be supplied to millions of homes throughout the country. By losing those units, we are diminishing the resilience of our grid and its ability to absorb unforeseen risks.
Our margin of capacity, particularly when it is cold in winter, is already worryingly low. We are also significantly reducing the number of power stations that can provide ancillary services, such as system balancing, frequency response and black start, which allows us to turn the lights back on in the event of grid paralysis or partial shutdown. In the absence of coal-fired power stations, how will we procure such essential, often under-appreciated, services in future?
Because of the technical nature of this subject, I find there is a lack of understanding of the comparative capabilities of different types of power generation. Intermittent renewables, along with nuclear, are simply technologically incapable of delivering the services I have described. The lack of nuance in consideration is leading us blindly to risk our energy security.
The third element of the coal trilemma is cost. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom), has rightly said on many occasions that securing electricity at the least cost to consumers is an absolute priority. We totally buy into that—it is a commitment the Conservative party made in our general election manifesto and it is one we should keep.
If we are to pursue an orderly transition away from coal, as the Government intend, it is only right that we do so in the most affordable way possible. That is why it is so important that, when we consider which technologies to promote to fill the gap left by coal, we do so on a whole-system cost basis. Such an approach more accurately reflects the costs that intermittent generators pass on to the system because they are not available all the time.
I understand that during yesterday’s meeting of the Energy and Climate Change Committee my hon. Friend the Minister of State noted that the latest analysis her Department has commissioned on whole-system costs is currently being peer reviewed and is nearing completion. I congratulate my right hon. Friend the Secretary of State for Energy and Climate Change on pushing ahead with that and urge her to make the findings available as soon as is practically possible, so that they can inform the growing debate on this incredibly important issue.
We face three key challenges associated with coal coming off the grid: the socioeconomic impact, the security of supply impact, and the cost of filling the gap. On the face of it, it seems a particularly daunting task, but I am pleased to say that it is not insurmountable. Nowhere is that more vividly illustrated than at the Drax power station in my constituency—if you think you have cooling towers in your neck of the woods, Ms Ryan, there are certainly plenty more in my part of north Yorkshire.
Many Members present will be familiar with Drax. It is the largest power station in the UK and generates approximately 8% of all the UK’s electricity. Over recent years it has gone through an incredible transformation by converting and upgrading some of its generating units to use sustainably sourced compressed wood pellets instead of coal. In doing so, it has addressed the three core issues I mentioned earlier.
On socioeconomic impact, switching from coal to biomass has helped Drax to protect and secure the 850 employees who are based at the power station. It has also created new employment opportunities across the biomass supply chain, which has attracted hundreds of millions of pounds of private investment.
On security of supply, thanks to the conversion it has already undertaken, Drax has become the UK’s single largest source of renewable electricity. Around 12% of the UK’s renewable power came from Drax in 2014. Crucially, this power is not only renewable but flexible and dispatchable, like coal or gas. It is available as and when we need it and can be ramped up or down to respond to the requirements of the grid at a moment’s notice.
On costs, as I have stated often in Westminster Hall and many times in the main Chamber, on a whole-system costs basis biomass is the cheapest and most affordable renewable technology available to us today.