The Government appeared to scale back its investment in carbon capture and storage (CCS) today, as it confirmed that it would not be backing with £1 billion of public money the flagship Longannet CCS demonstration project in Scotland.
The
Department of Energy and Climate Change (DECC) said a decision had been taken "not to proceed with
Logannet", but instead spend the £1 billion earmarked for Longannet on other
CCS demonstration projects. But while re-affirming CCS was a "key technology for the UK’s long term energy strategy," Secretary of State for Energy and Climate Change Chris Huhne said, "a billion pounds is enough to demonstrate this vital new technology in the UK", adding the money needed to be spent in the "most effective way" possible.
Level of future funding unclear
Before its decision to pull out of Longannet, the Government was committed to backing a further three large scale demonstration projects. Whilst a spokesperson for DECC told
GreenWise that commitment hadn’t changed, it is unclear if future projects will be in line for additional
funding over and above the £1 billion earmarked for Longannet.
"We are still committed to four [CCS projects]," the spokesperson said, adding only that the Coalition had "only ever announced the specific £1 billion for demo one."
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, experts say it requires large amounts of public backing and long-term commitment.
Earlier this month, the
Guardian reported that the Longannet project was "
close to collapse" after talks between Scottish Power and the Government ran into trouble over the commercial viability of the project. A detailed study by Scottish Power and its partners and National Grid, which is now publicly available, raised concerns that the CCS scheme would not be able to go ahead without further public funding.
Today, Huhne said: "Despite everyone working extremely hard, we’ve not been able to reach a satisfactory deal for a project at Longannet at this time, so we’ve taken the decision to pursue alternative projects."
DECC has yet to announce which alternative projects it might back, but earlier this year it submitted applications for EU funding for seven CCS schemes, including Longannet. A DECC spokesperson recently said it would launch "an accelerated selection process" by the end of the year.
Reaction to closure
The CCS industry today reacted with disappointment at the news the Government would not be backing the Longannet project, but welcomed the fact it would be re-allocating the £1 billion to new projects.
"Substantial investment has already been made by developers who remain bullish," said Dr Jeff Chapman, chief executive of the Carbon Capture and Storage Association. "Out of thirteen projects submitted for European funding, seven were from the UK compared to one each from other member states. Longannet was one of the seven consortia competing to develop projects – the remaining six projects remain viable and are proceeding at pace."
However, green campaigners said the future development of CCS technology in the UK was threatened by today's decision. "This news is massively disappointing and threatens Scotland's, and the rest of the UK's, ambition to be at the forefront of developing this new technology," Dr Richard Dixon, director of WWF Scotland said.
Scotland's First Minister described it as a "bad decision".
The six CCS projects are at Drax power station in North Yorkshire; Killingholme in Yorkshire (C.Gen); Stainforth in Yorkshire (Don Valley, formerly Hatfield); Ayrshire in Scotland (Peel Energy); Teeside, North East England (Progressive Energy); and Peterhead, Scotland (SSE Generation).
The Government is due to publish its CCS Roadmap, setting out an investment programme for development of the technology, shortly.
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