RUGELEY POWER station in Staffordshire has shelved plans to retrofit a flue gas desulphurisation (FGD) unit because the government is still working on a policy for curbing sulphur dioxide emissions.
Rugely owner International Power is also waiting to see how a new European Union carbon trading system affects the cost of carbon dioxide emissions.
The government's policy announcement is expected this spring. It will have a bearing on how much sulphur coal fired plants have to remove from their flue gases.
'It's impossible to specify the performance of our FGD until the government's position is clear, ' said International Power project manager Duncan Thew.
Rugely is one of Britain most modern coal fired power stations. The 1,000Mw plant was last week granted permission to build a £50M plus FGD unit to scrub up to 98% of sulphur dioxide (SO 2) from its exhaust stream.
'Though we have the permission in hand no final decision's been made to fit [the FGD]', said International Power project manager Duncan Thew.
'There's too much uncertainty over the pending European Union (EU) large combustion plant directive and the carbon trading scheme. We're still trying to understand what the ramifications are.'
The large combustion plant directive will set limits on SO2 emissions from all thermal power installations of over 30MW capacity.
It is not due to be transposed into UK law until 2008 but the government is expected to make an announcement in the spring on how the limits will be applied.
In the longer term, generators are worried that carbon trading could land a devastating economic blow on coal fired generation.
There is also growing concern that Britain is failing to exploit its coal resources and increasing its reliance on imported gas instead (NCE 8 January).
Carbon trading is being launched in all of the EU member countries. Each country has been allocated a carbon limit and a set number of carbon 'credits' that can be bought and sold by industry.
Coal fired generation has been winning back market share against gas following a low in the mid-1990s, as gas supplies become more stretched and costs rise, said Coal Research Forum chairman, Brian Ricketts.
But coal produces more carbon dioxide per unit of electricity generated than gas.