DECC insists CCS will still benefit from £1bn funding
Green funding news – by GreenWise staff
28th November 2011
The Department of Energy and Climate Change (DECC) is insisting carbon capture and storage (CCS) will still benefit from £1 billion of Government funding, despite news the Treasury will divert some of the money to new infrastructure projects between now and 2015.
DECC, which just a
few weeks ago, said £1 billion would be re-allocated to other
CCS projects following its withdrawal of the
Longannet CCS project, admitted today that some of the money would be spent on more urgent infrastructure projects during this Parliament. But it insisted the £1 billion was not being "raided" by the Treasury, but would instead be allocated over two spending review periods. The assurance follows the revelation this morning by Chief Secretary to the Treasury, Danny Alexander, that his department was preparing to divert some of the CCS money to help
finance a new £5 billion infrastructure fund the Chancellor of Exchequer is set to announce in his autumn statement tomorrow.
"Nothing has changed at all," a DECC spokesperson said. "The funding for CCS – the £1 billion we announced before – is still going to be made available, but it’s not going to be spent as quickly as we thought.
"[Danny Alexander] was pointing to fact that the £1 billion is unlikely to be spent in this review period. We would have liked it to, but realistically, we are not going to be spending it all in this review period."
Alexander was speaking on BBC 5 Live’s Breakfast programme. Explaining that the Government had pulled out of the £1 billion Government funded Longannet project, he said "much of the money" would now be "reallocated" during this Parliament on other infrastructure projects.
In a bid to kick-start economic growth, Chancellor George Osborne is tomorrow expected to announce £5 billion worth of funding for new infrastructure projects, including schools, energy and road building.
"We're launching a new competition to provide £1 billion for CCS but that competition, obviously, is going to take longer," Alexander said about the re-allocation of funding over this Parliament term.
Longannet withdrawal
DECC confirmed in October it would no longer be backing its flagship Longannet CCS demonstration project in Scotland, and instead would re-allocate the funding to new CCS projects. It is committed to investing in a total of four CCS demonstration projects between now and 2020.
CCS involves capturing the carbon dioxide emitted from the burning of fossil fuels, transporting it and storing it in a secure geological facility. Once proven on a commercial scale, analysis has shown that it could play an important part in a mix of energy technologies and measures to reduce global emissions and help avoid the most serious consequences of climate change.
However, the collapse of the Longannet project means a delay in getting a UK CCS demonstration project up and running as soon as had been hoped.
However, the Government submitted a total of seven CCS projects, including Longannet, for EU funding earlier this year. These projects are now undergoing scrutiny by the European Investment Bank, and recommendations for award of funding will be made in mid-2012.
DECC recently said it would launch "an accelerated selection process" on CCS projects by the end of the year.
Meanwhile, a DECC spokesperson said today the Government was "hoping" to get the timing for UK funding "in line with the European process for CCS funding".
The re-allocation of CCS funding in the current spending review period comes amid growing concern that the Government is retreating on its green agenda.
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