Jackie Doyle-Price: Why the closure of Tilbury power station should set alarm bells ringing in government

Jackie Doyle-Price is the Member of Parliament for Thurrock.

Earlier this year, the Public Accounts Committee warned the Government that the necessary investment in new energy generation was not coming forward quickly enough to ensure that conditions were made sufficiently attractive to private investors.  Day by day we witness events that support that advice.

Earlier this week, Tilbury Power station generated power for the last time after sixty years of operation. The station, situated on the bank of the Thames, was a coal fired station which generated enough power for the whole of Essex.  Following the adoption of the EU’s Large combustion Plant Directive, Tilbury had to close.

Initially, RWE intended to build a new state of the art coal-fired station on the site.  Alas, it was not to be.  As Secretary of State for Energy and Climate Change, Ed Miliband decreed that no new coal-fired power stations be built unless they captured and buried all their greenhouse gases by 2025.  This was a death-knell to coal-fired power generation.  So while Germany is building new coal-fired stations, the UK is investing in more expensive methods of power generation.

Forced to ditch coal, the management at Tilbury looked at biomass.  Wood pellets sourced from the US could be brought directly to Tilbury by ship.  The management then decided: why wait?  They converted the coal station to biomass for the remainder of the operating hours under the directive.  For the last two years, Tilbury has been a substantial provider if renewable energy.

Sadly, the construction of the new biomass plant will not now go ahead.  RWE cannot make the investment pay, so the power station will close.  The new plant would have required investment of £450m, would have generated 870mw of electricity, and would have been the largest dedicated biomass station in the world.

The cancellation of this project should send alarm bells ringing throughout Government. As our coal-fired stations close we are going to be left with a deficit in energy production.  We are relying on private sector investment to fund new energy production, but it simply isn’t coming forward soon enough.  There is rather less capital about in the world than when the climate change agenda was dreamt up, and since the companies we are relying on are operating in a global marketplace, we need to make sure that the environment for investment is attractive.  In the case of RWE at Tilbury it simply wasnt attractive enough.

So how are we going to keep the lights on?  Well, the lights won't go off but we, as consumers, will end up paying more for our electricity as we import ever more from Europe.  With fuel costs being a major source of poverty, it is the most vulnerable consumers who will end up paying the  price of climate change.  The shift to renewables risks becoming a regressive tax.

For my part, I believe that killing off coal production was unwise.  Coal is a relatively cheap source of energy.  And the emissions from coal-fired stations are nothing compared with those generated by cars.  The climate change lobby may pride themselves that they are ridding the world of dirty coal, but it is coming at a price that consumers will pay.