"We can't afford to forget coal which contributes about 35 percent of UK power and has an important part to play in UK power policy," Wicks said.

The fuel source is controversial because it produces more of the planet-warming gas carbon dioxide than any other power source.

Protesters from environmental group Greenpeace interrupted Wicks as he addressed a coal conference at the Lord's cricket ground in London.

"Coal power stations are out-of-date climate-wreckers," the group said in a statement.

Wicks said it would take time for cleaner coal technologies to be developed, but that the British government had committed to funding carbon capture and storage trial plants.

COAL NEEDED TO DIVERSIFY ENERGY MIX

E.ON chief executive Paul Golby told the conference if the British government rejects new nuclear and coal power plants, that would over-reliance on gas.

"Diversity is the key. We're in a race to replace ageing power stations and must strive to avoid sleepwalking into a gas-dependent future," Golby said.

Britain needs reliable alternatives to its dwindling North Sea gas reserves and also faces an increasingly urgent need to renew its power generation infrastructure.

Last month, it threw its weight behind a new generation of nuclear power plants, which can generate power without producing carbon emissions, but are still regarded as an environmental disaster by groups like Greenpeace.

They also take longer to bring online than coal-fired plants.

E.ON was committed to developing a range of energy generation, coal-fired, renewables and nuclear, Golby said.

The German utility has put forward plans for Britain's first new coal-fired power station for around 30 years and a local government authority has recommended the central government should approve them.

It has said it hopes to get approval for the new plant at Kingsnorth in Kent, southern England, this year.

Wicks said the rise in British coal sales prices had benefited producers and would ensure coal supply for many years to come.

The cost of coal-fired generation rose to 2.89 pounds per giga joule (GJ) in 2007 from 1.61/GJ in 2006, an 80 percent increase, he said.