Government decision to axe £1bn carbon capture competition 'devastating'
The Government has been accused of dealing a devastating'' blow to clean power technology hopes by axing a £1 billion competition to develop carbon capture and storage on power stations.
Shortly after the Chancellor backed investment in energy research in the spending review, an announcement to the London Stock Exchange revealed the funding to develop technology to capture and store carbon emissions from power stations was no longer available.
The decision means the competition, which had two bidders - the White Rose scheme in Yorkshire and the Peterhead scheme in Scotland - cannot proceed on its current basis, the Government said.
Carbon Capture and Storage Association chief executive Dr Luke Warren said the announcement was devastating'', and warned the UK would lose the opportunity to develop cost-effective ways of cutting carbon.
He added: Only six months ago, the Government's manifesto committed £1 billion of funding for CCS.
Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business.
This announcement is a real blow to confidence for companies investing in CCS.''
EEF, the manufacturers' organisation, warned that for many sectors such as steel and cement there was no other way to cut emissions from industrial processes than capturing and storing the carbon.
The technology had the potential to halve the costs of decarbonising by 2050, EEF said.
Claire Jakobsson, the organisation's head of climate and environment policy, said: In choosing to save a relatively small sum of taxpayer money in 2015, Government is unnecessarily committing vast amount of future energy consumers' money.''
The White Rose project, near Selby, North Yorkshire, involved a new coal fired power station fitted with technology to capture 90% of its carbon emissions and develop a pipeline to storage under the North Sea.
The scheme's backers said it would generate 1,000 construction jobs as the power plant was being built, and 1,000 for the construction of the pipeline, as well as around 100 permanent jobs, and would power 630,000 homes with low carbon electricity.
Drax power company announced in September it was pulling out of the White Rose scheme, due to a drastically different financial and regulatory environment'' with a falling wholesale price of electricity drop and cuts in Government support for low carbon technology.
At Peterhead, Scotland, Shell and SSE were looking to develop a project to capture up to 15 million tonnes of carbon dioxide emissions and transport them by pipeline offshore for long-term storage deep under the North Sea.
It was estimated that around 600 jobs would be created at the height of the construction phase.
A Shell spokesman said: We have worked tirelessly over the last two years to progress our plans for this project.
It has the potential to bring huge value to the UK, both in terms of immediate emissions reductions and developing knowledge for the benefit of a wider industry.
Government funding to support this world-first demonstration project, through the competition, was important to achieving the aim of making the technology commercially viable in the shortest possible time.
While we acknowledge that this decision has been made in the context of a difficult spending review, without that funding, we no longer see a future for the Peterhead project in the near term.''
A spokesman for SSE said: Whilst SSE appreciates that being in government involves taking difficult decisions, it is extremely disappointed by today's announcement that the Government is removing all committed public support for the demonstration of Carbon Capture and Storage (CCS) in the UK.
SSE believes this decision represents a significant missed opportunity for the UK.''
Shadow energy secretary Lisa Nandy said: Carbon Capture and Storage offers huge economic opportunities for Britain, and it could be a crucial tool for sustaining many of our most important industries in the years ahead.
Year after year the Prime Minister has personally promised to support CCS, so this is a huge betrayal for all of the communities who could have benefited so much from this cutting-edge technology.''
Experts raised concerns that the cancellation of the competition, which comes just days after Energy Secretary Amber Rudd said it was imperative'' to build new gas fired power plants as polluting coal was phased out, would make it harder for the UK to meet its legal targets to tackle climate change.
Professor Jim Watson, director of the UK Energy Research Centre, said: Without CCS available, the Government's plans to use gas as a 'bridge' to a low carbon future will have much more limited mileage in the medium term.''
Professor Stuart Haszeldine, director of Scottish Carbon Capture & Storage (SCCS), added: 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.''