UK rejigs £1bn carbon capture competition

London – The UK government has relaunched its £1-billion competition for carbon capture and storage (CCS) – a technology, it said, was key to ensuring energy security, reducing emissions and that could contribute £6.5 billion a year and 100,000 jobs to the UK by 2030.

This fund replaces a previous £1-billlion scheme, which was left with Scottish Power’s project at Longannet as the sole entrant, after other generators withdrew citing uncertainty over the long-term economics. The government, itself, pulled the plug on the Longannet project late last year, after an engineering study costed it a bit above the £1-billion limit.

Called the ‘CCS Commercialisation Programme’, the new competition offers £1billion to support the upfront costs of early CCS projects – suggesting that the funding could be spread across a number of smaller projects – rather than a single, large-scale project required to kick-start CCS in the coal-fired power sector.

The revised scheme is open to gas-power as well as coal-power generators, and industrial operators, which are part of a CCS cluster project. The projects can use pre- or post-combustion technologies, but must be ‘CCS full chain’, or capable of being part of a full chain project in the future. They must be operational by 2020 at the latest.

The government has also promised possible extra funding through the Contracts for Difference scheme. A further £125 million has been earmarked to support R&D, including a new CCS research centre, while the government also promised further long-term incentives within the Electricity Market Reforms.

Edward Davey, secretary of state for energy and climate change, added that government would work with industry to help develop the skills, supply chain, storage and infrastructure required for CCS. The UK’s fledgling industry, he added, would also benefit from lessons learnt on other projects around the world, particularly in terms of driving down the costs of CCS developments, which have been estimated at £1 billion for a single coal-fired power plant.

“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 and an industry that can bring jobs and wealth to our shores,” said Davey.

According to Jeff Chapman, CEO of the Carbon Capture and Storage Association said his organisation was “looking forward to working with Government to enable industry to capitalise on today’s announcement to ensure extensive investment in CCS over the coming decades.”

Slightly less enthusiastic was Friends of the Earth’s head of campaigns Andrew Pendleton, who said: “If it can be proven on an industrial scale, CCS technology could play a role in cutting carbon from electricity generation and heavy industrial processes.

“But the Government needs to get its act together. Today’s CCS news is welcome, but the rollout of CCS was made much harder by the recent announcement that new gas-fired power stations built in the next few years will not require CCS until 2045.