The opportunity to demonstrate viable carbon capture and storage (CCS) technology in the UK is to get a second chance after DECC unveiled plans for a new £1 billion competition
The previous CCS competition, which was launched in 2007 by the former government, collapsed last year when DECC decided not to provide further funding for a demonstration plant at the Longannet power station in Fife. The 2,400MW generating facility, which is owned by ScottishPower, was the only one left in the competition.
Industry bodies fear the new competition, the CCS Commercialisation Programme, details of which were first revealed in the Official Journal of the European Union in February, could also end in failure.
“The government must learn lessons from its previous competition, which took too long and was eventually abandoned. This time around the competition must be simpler and completed as quickly as possible,” said Rhian Kelly, director of business environment at the CBI.
Her warning echoes the findings of a recent report from the National Audit Office on the original competition. It concluded that DECC must learn the lessons of the earlier failure if further time is not to be lost, and value for money achieved on future projects.
Despite the lack of success in the past, energy and climate change secretary Ed Davey believes the UK can still create a world-leading carbon capture sector.
“This is a really exciting time for the fledgling CCS industry. Our offer is one of the best anywhere in the world. We have £1 billion available to support the upfront costs of early projects,” he said.
DECC also says further funding may be available through “contracts for difference” – which will guarantee prices for low-carbon electricity generated by energy companies. This type of contract forms a key plank of the planned electricity market reform and will replace the Renewables Obligation. In addition, DECC is providing £125 million to fund research and development, including creating a new £13 million CCS research centre.
The funding announcements were accompanied by a roadmap, setting out the framework to enable long-term investment in the industry, with up to 30GW of power generation subject to CCS by 2030, and the creation of a CCS cost-reduction taskforce, headed by Dr Jeff Chapman, chief executive of the Carbon Capture and Storage Association.
