DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2007/107)
issued by The Government News Network on 19 November 2007
Key roles for
renewables and carbon capture and storage in the UK's diverse
low carbon energy mix
A major expansion of energy from renewable sources and the launch
of the competition to build one of the world's first carbon
capture and storage (CCS) plants were among the measures set out
today in a major speech on climate change by the Prime Minister.
The speech comes on the day the Commission on Environmental
Markets and Economic Performance (CEMEP) publishes its
Government-commissioned report setting out the steps needed to
unlock the business opportunities that exist in tackling climate change.
Business and Enterprise Secretary John Hutton said:
"The direct link between tackling climate change and
long-term wealth creation is now beyond doubt. The business
opportunities, once fully unlocked, will be vast.
"Pioneering low carbon technologies, including renewables,
CCS and, subject to our decision, new nuclear, will help secure
diverse future energy supplies while tackling climate change. In a
global market the UK's expertise in developing these
technologies will also open up business worth billions.
"With China alone building an average of two coal-fired
power stations every week, the development in the UK of technology
to capture and safely store up to 90% of CO2 emissions is
critically important. The launch of the competition today puts the
UK on track to build within seven years one of the world's
first commercial-scale CCS projects on a coal-fired power station.
"The CEMEP recommendations will be central to helping the
government give business the long term certainty they need to
invest in the development of cost-effective solutions to
environmental problems."
Developments announced by the Prime Minister today include:
* Tidal lagoons and barrages below one gigawatt capacity will
receive extra support through the Renewables Obligation,
potentially benefiting lagoons proposed for Rhyl, Swansea Bay and elsewhere.
* This follows the previous announcement by John Hutton of a
feasibility study into the possibility of generating tidal energy
from the river Severn. A Severn barrage of potentially 8.6GW
capacity could generate 5 per cent of Britain's electricity;
* The launch of the Government's Carbon Capture and Storage
competition. This follows the previous announcement by John Hutton
that the project should demonstrate post-combustion CCS on a
coal-fired power station, with CO2 stored offshore.
Post-combustion technology is the most globally relevant
technology. It can be retro-fitted to the vast proportion of
existing and planned coal-fired power stations globally and it
complements the developments in Norway and the United States of
alternative CCS technologies; and,
* Following consideration of the responses to its consultation,
the Government will announce a decision on future nuclear power in
the new year.
Also published today, the report by the Commission on
Environmental Market and Economic Performance (CEMEP) describes
how the threat of climate change will stimulate investment in new
technologies and innovations and help transform existing sectors
of the economy, creating entirely new industries. The Commission
concludes that:
* The overall added value in the low carbon energy industry could
be as high as $3 trillion per year worldwide by 2050, employing
more than 25 million people. The opportunities could be even
greater as low-carbon technologies become pervasive across the economy;
* To seize these opportunities the UK needs to match the leading
locations in the world to innovate and do business in
environmental markets. We must attract the investment today to
help create tomorrow's prosperity, jobs and cleaner
environment; and,
* Action is needed to create a clear and credible environmental
policy framework and to provide increased support for innovation.
In particular there should be greater use of the public
sector's £150 billion spending power to create 'lead
markets' for new products.
A Government response to the report will follow and John Hutton
will host a Green Business Summit in the New Year.
Notes for editors
1. The Prime Minister was speaking at the WWF 'A One Planet
Future' event in central London. A copy of his speech can be
found at http://www.number-10.gov.uk
2. Carbon Capture and Storage (CCS) is a type of Carbon Abatement
Technology in which the carbon in fossil fuels is captured (as
CO2) and committed to long-term storage in geological formations
such as depleted oil and gas fields. The Government will provide
up to 100% of the additional capital and operating costs incurred
by the project developer in successfully demonstrating the
technology on a long term commercial scale. The pre-qualifying
period for the competition will end in March 2008. Companies that
successfully pre-qualify will be invited to take part in the next
stages of the competition in April 2008, with the aim of
announcing the competition winner by May/June 2009.
3. An information memorandum for potential CCS competition
entrants is published today at: http://www.berr.gov.uk/energy/sources/sustainable/carbon-abatement-tech/ccs-demo/page40961.html
4. The potential that the North Sea has for CO2 storage was also
outlined today with the publication of a report from the North Sea
Basin Taskforce. The study identifies potential storage sites in
the North Sea, assesses the possible need for a pipeline
infrastructure to transport CO2 around the North Sea and the
potential costs of such an infrastructure. It also identifies the
economies of scale that could arise from the co-ordinated
development of the infrastructure. The North Sea Basin Task Force
was initiated by Norway's then Energy Minister, Odd Roger
Enoksen, and the Energy Minister, Malcolm Wicks, in 2005. The aim
of the Task Force is for UK and Norway (and now the Netherlands)
to co-operate on areas of work that can help the development of CCS.
5. The Commission on Environmental Markets and Economic
Performance (CEMEP) was an ad-hoc advisory body established in
November 2006. Commission Members were drawn from a diverse range
of interests, including public bodies, industry, NGOs, the
research community and the unions. Full Commission meetings were
chaired jointly by Alistair Darling and David Miliband, the then
Secretaries of State for Trade and Industry and Environment, Food
and Rural Affairs. Ian Pearson and Malcolm Wicks, now Science and
Innovation and Energy Ministers respectively, also attended.
Ministers provided guidance on the Commission's early
thinking and emerging recommendations, but the final report and
recommendations are agreed by non-Government Members of the
Commission, and are addressed to Government as whole.
6. The CEMEP report can be found at: http://www.defra.gov.uk/environment/business/commission/index.htm
7. Tidal lagoons are walled impounded areas within an estuary
(more akin to a swimming pool than a barrage or dam). They can be
freestanding or alongside the bank/shore. They generate
electricity from the rise and fall of the tides in the same way as
a barrage. Work is currently underway to identify the level of
support that tidal lagoons and barrages up to 1GW should receive
through the Renewables Obligation. The detail will be included in
the response to consultation on the RO. It will be higher than the
current level of 1 ROC. This announcement does not apply to a
Severn Barrage, which would almost certainly be above 1GW
capacity. It's unlikely that the RO in its current format
would support a Severn Barrage.