UK: Plan to relax emission curbs to head off energy crisis

The Government is considering lifting constraints on harmful emissions from coal-fired power plants in order to ensure energy supplies in a crisis.

The highly controversial move will be welcomed by generators, who have been arguing for greater flexibility in case of emergencies. However, it will be greeted with dismay by environmental groups and could affect Britain's ability to meet targets governing sulphur and nitrogen dioxide emissions produced by coal-fired electricity plants.

The Government has made renewable sources of energy a priority in its power policy. But most experts believe it is unlikely that it will meet its target of 10 per cent of the nation's energy coming from renewables by 2010. With Britain set to become a net importer of gas by next year, security of supply has moved higher up the agenda.

Lifting emission constraints could also set the UK on a collision course with the European Union. An anti-pollution directive, the Large Combustion Plant Directive, says that a country is allowed to raise its limits on sulphur and nitrogen dioxide emissions only in exceptional circumstances.

"We are talking to government about how, in emergency situations, one could make any adjustments to emission limits," said Neil Davies, a policy manager at the Environment Agency.

"It is in the early stages but we are specifically looking at coal-fired plants and sulphur and nitrogen emissions. Will they have sufficient flexibility to meet peak demand in any crisis?

"In the short term, especially up to 2010, coal will have a role to play in the UK in terms of energy supply. Up until then, it seems a sensible policy to look at what role coal could play at peak demand," he added.

The Government has come under pressure to decide how to implement the EU directive, which comes into force in 2008. Coal industry executives have warned that adopting a "national" plan - which would set an absolute ceiling on emissions - would lead to widespread job losses.

Instead, they have advocated that Britain should opt for the alternative based on "emission limit values" (ELVs) - a system that would allow coal-fired power stations to keep producing as long as emissions reach a certain standard of cleanliness.

The Telegraph has learnt that the Government will propose to the EU that it adopt a modified approach. The generating sector would follow the ELV plan while all other sectors would have to adopt the national scheme.