Treasury confirms £1 billion for Carbon Capture and Storage Competition “no longer available”

Scheme to develop “carbon capture and storage” technology at power stations axed. Professor Stuart Haszeldine, SCCS Director: “It has now become clear that announcements made by Chancellor George Osborne regarding energy innovation and support for low-carbon electricity were economical with the facts about support for Carbon Capture and Storage (CCS) in the UK.”

Scottish Energy Minister Fergus Ewing said: “The UK Government’s decision to scrap its £1 billion Carbon Capture and Storage (CCS) programme is a disgrace. It shows complete disregard for tackling climate change, utter indifference to developing the crucial new technologies that will cut emissions and is another UK Government hammer blow to energy generation in Scotland.

”Just last week the Secretary of State announced an energy strategy heavily reliant on gas, yet the Chancellor has slashed support for the only credible technology which can reduce emissions from large scale gas generation.

“The UK has 30% of Europe’s CO2 storage capacity alongside an oil and gas infrastructure which can be utilised for CCS. The CCS Commercialisation Programme has already been running for 10 years. – had the competition been allowed to run its course, the world’s first commercial scale gas powered CCS plant could have been built in Peterhead creating new jobs, blazing a trail for innovation and potentially attracting significant investment to the UK.

“This should have been a huge industrial opportunity. Instead the decision to pull the plug on the CCS programme, to meet a deeply flawed austerity agenda, is breathtakingly short-sighted, even for this UK Government.”

Professor Haszeldine continues: “A focus on CCS research and development is not enough to deploy this essential climate change technology – project developers and others in the CCS community are united in their stance that large-scale projects are needed on the ground.  Multiple analyses have demonstrated that this is a feasible and cost-effective method to decarbonise not just UK electricity, but also heat and industry, whilst driving improved efficiency.

“The UK Government’s reliance on nuclear power to deliver our future electricity needs depends entirely on whether projects such as Hinckley Point can actually be delivered on time. All of the current three versions of this power plant under construction globally are taking double the anticipated timescales at treble the anticipated price.  Small modular nuclear power, although promising, remains entirely unproven in a commercial supply setting. If new nuclear cannot be delivered at scale and on time, the UK runs the future risk, as of today, of becoming a distressed buyer of rapidly built gas power plant, which locks in UK carbon emissions for the next 40 years. To me, this does not look like prudent management.

“The new electricity supply landscape proposed by the Government, but a long way from being delivered, means all low-carbon electricity providers should be bidding into the supply market under equal terms. This means that low-carbon renewable providers must provide reliable ‘ firm’ power delivery and that CCS projects should receive the multiple underwriting and favourable contract benefits gifted to Hinkley and its successors. CCS can deliver this and it would be perverse to prevent it from doing so.”

Dr Jenifer Baxter, Head of Energy and Environment at the Institution of Mechanical Engineers, said: “This is very disappointing news. There have been concerns about the initial costs of this technology, but we will only be able to properly assess the viability of UK Carbon Capture and Storage (CCS) upon the successful delivery of a demonstration project. Demonstration projects are a recognised requirement for full commercialisation of all large technologies, without such, new energy management technologies will remain in the shadows.

“If we are serious about building a clean and secure energy sector we need a diverse energy system, and CCS is central to this. In addition to the potential this technology has in making coal-fired generation low carbon, there is great promise for this technology to be used to retrofit gas-fired power stations in the future as well.

“The Government has outlined plans for the winding-down of coal-fired generation. With just one nuclear reactor currently being planned, the UK looks set to experience a new dash for gas. Without CCS technology this will mean we are locking ourselves in to relying on unabated fossil fuel power for generations to come.”

Responding to the UK Chancellor’s decision, Jonathan Church, climate and energy lawyer at ClientEarth said: “This an extremely damaging move by the UK government. Development of CCS has been delayed for years and by successive governments, and by axing the £1bn grant to fund these projects, the UK government is essentially closing off one of the key avenues in the UK’s transition to a low-carbon economy.

“The need for CCS was highlighted by the Committee on Climate Change in its July report this year. And a commitment to this funding was celebrated in the Conservative’s General Election manifesto. Supporting CCS should be a priority and certainly not something wiped out, apparently on a whim, just days before the Paris conference on climate change. This can only exacerbate investor concerns about how the UK’s climate targets will be met; something which will cost, not save, money in the long run.”