Five months after withdrawing its support for a carbon capture and storage (CCS) demonstration project at Longanett, DECC has relaunched its £1 billion support programme for CCS
Energy firms and large industrial sites developing commercial-scale CCS projects have until 13 April to apply for a share of the funding, which forms the core of the government’s new action plan to encourage widespread deployment of the technology in the 2020s.
In its “CCS roadmap”, DECC states capturing and storing CO2 emitted by the UK’s power plants and heavy industry will be a vital to decarbonising the country’s energy supply and meeting greenhouse-gas emissions reductions targets.
It agrees with the Carbon Capture and Storage Association’s projection that by 2030 the UK could have enough CCS to support 20-30 gigawatts of electricity generation, and envisions CCS installations across the country enabling thousands of tonnes of carbon to be stored under the North Sea.
“The potential rewards from CCS are immense: a technology that can decarbonise coal and gas-fired power stations and large industrial emitters, allowing them to play a crucial part in the UK’s low carbon future,” said energy secretary Ed Davey, launching the new competition.
"What we are looking to achieve, in partnership with industry, is a new world-leading CCS industry, rather than just simply projects in isolation – an industry that can compete with other low-carbon sources to ensure security and diversity of our electricity supply, an industry that can make our energy intensive industries cleaner.”
Along with the £1 billion of capital offered to organisations, DECC will be spending £13 million to set up a CCS research centre to coordinate and share academic study into the technology and will be creating a CCS cost reduction task force, similar to that created to improve the cost-effectiveness of offshore wind in 2011.
The roadmap also outlines the government’s support for CCS offered through electricity market reform, including: requiring new fossil fuel powered stations are CCS ready, exempting power plants with CCS from the carbon price floor and exempting CCS projects supported by its commercialisation programme from the emissions performance standard.
The Carbon Capture and Storage Association (CCSA) welcomed the roadmap saying it offered a world-leading support package for the sector.
“The government has recognised that only with a firm long-term policy, coupled with clear financing mechanisms, will we enable CCS to fulfil its role in reducing emissions and decarbonise the power sector by 2030,” said CCSA chief executive Jeff Chapman.
DECC’s proposals were also greeted positively by the Scottish government, which had been vocal in its criticism of the collapse of the previous CCS competition.
Scottish energy minister Fergus Ewing said: “Following the disappointment last year over Longannet and the previous UK government's abandonment of the earlier Peterhead CCS project, it is essential that Westminster clearly demonstrates its commitment to supporting the commercial development of CCS, especially as the continued commitment from both industry and the Scottish Government is so clear.
In the roadmap, DECC revealed that its lack of clarity over how much risk it was willing to take on and how much finance was available for projects, were key reasons behind the failure of the last competition. According to a National Audit Office report quoted in the roadmap, this uncertainty had led to the participants to have “unrealistic expectations” when it came to final contract negotiations.
The ScottishPower Consortium’s Longanett CCS demonstration project was abandoned in October 2011, after DECC and the developers failed to agree on funding levels for the scheme.
