Role for coal

Scottish and Southern Energy (

) has agreed the terms of a five-year deal with

to purchase fuel for its Ferrybridge power station.

The recent installation of flue gas desulphurisation equipment at the station means the UK's higher sulphur coal can now be used to generate power.

Under the proposed agreement, SSE will buy 3.5 million tonnes of coal between 2009 and 2015, which represents around 15 per cent of the station's coal requirements in that period.

The coal will be sourced from deep mine and surface sites in the UK, including Kellingley Colliery in North Yorkshire. SSE has agreed to provide a loan to UK Coal so that production facilities at a number of UK Coal sites can be upgraded.

Ian Marchant, chief executive of SSE, said: ‘With its higher sulphur content, the UK's coal has previously been unsuitable for use in SSE's power generation plants. Our investment in equipment to remove emissions of sulphur means we can now make this substantial commitment to an indigenous source of fuel, thereby supporting jobs in the UK's mining industry.

‘We are aiming to reduce the carbon intensity of our power generation by 50 per cent by 2020, but the security of the UK's energy supply will continue to require a role for coal for the foreseeable future. In this context, it makes very good sense to diversify our sources of fuel supply.’