MP calls for immediate statement from UK govt on carbon capture and storage

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  By a Newsnet reporter

Banff and Buchan MP, Dr Eilidh Whiteford, has called for an emergency statement following press speculation that the UK will not receive any funding for the first round of Carbon Capture and Storage (CCS) projects under the EU’s NER 300 funding scheme.

Failure by the Tory-led Westminster government to provide full financial details in their application for funding has resulted in no UK projects being given funding for the first stage of the scheme.

CCS aims to capture carbon emissions and store them safely underground or deep beneath the sea.  Development is still in the early stages, but industry analysts believe that technology could make a substantial contribution to energy security without the increased carbon emissions which are thought to be implicated in climate change and instability.  The main technological hurdles to be overcome lie in combining CCS with power plants in a way that is financially viable.

The European Commission will not reveal which projects will get funding until next month from the NER300 scheme. However the UK did not meet the deadline at the end of October to pledge that it would match EU funding, and sources within the European Commission say it is already clear that the British government has not provided adequate guarantees for national co-financing.

Speaking to Reuters news agency on condition of anonymity, a source within the EC confirmed that no British projects had qualified “because of lack of funding detail”.

It was expected that more than €4 billion (approximately £3.25 billion) would be handed out from the NER300 fund. Sources within the industry fear that, without EU funding, the CCS demonstration projects will not get off the ground.

Four UK projects were in the running for funding from the NER300 scheme, including a 340MW post-combustion capture retrofitted to part of an existing 1180MW Combined Cycle Gas Turbine power station at Peterhead.  The Aberdeenshire project could have benefited from EU funding of £250 million if the UK government had supplied the necessary guarantees to the European Commission.

The news that the UK government has failed to secure European funding for CCS project development comes as a new report is published, which shows that CCS combined with fossil fuel power generation could be cost-competitive with other low-carbon energy sources in the 2020s.  

The report from the Carbon Capture and Storage Cost Reduction Task Force, commissioned by the Department of Energy and Climate Change, The Crown Estate and industry looks at how costs could be reduced on the next wave of CCS projects.  The report finds that by early next decade the sector should be able to generate electricity at a levelised cost approaching £100 per MWh and below that shortly afterwards.

However the report stresses that the cut in costs requires an investment in large offshore CO2 storage clusters, which bring together multiple emitters with large, high usage, shared pipelines; large power stations with improved capture technology; and exploitation of potential overlaps with the oil industry, such as enhanced oil recovery in some North Sea oil fields.

Commenting, Dr Whiteford, said:

“These rumours are deeply worrying and, if true, would signal a clear lack of vision and commitment to CCS and renewable projects in Scotland.

“The UK government needs to clarify whether these rumours are true as a matter of urgency. If they have no substance then the government needs to say so. Until it does, its silence on the issue only deepens concerns about its commitment to the industry, causing uncertainty for investors and putting thousands of future jobs at risk.

“Even if these rumours are false, the lack of communication by the Tories and their Lib-Dem allies on CCS investment gives out mixed messages to those interested in investing in major projects in Scotland. This is a huge concern, but it is stands in stark contrast to the clear message of the Scottish Government on CCS, as it does its record on renewable research and investment.

“This really is a tale of two governments. While the London government dithers, the Scottish Government is fully committed to fulfilling Scotland’s potential to be a world leader in CCS technology.

“We have already seen the benefit of this can do attitude in the renewable sector, and, only this week we have had the creation of a further 750 jobs. London needs to clarify its position now, and fully commit itself to properly support the CCS industry in Scotland.”