DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2008/132)
issued by The Government News Network on 30 June 2008
The four bidders
that have pre-qualified in the Government's carbon capture
and storage (CCS) demonstration competition were named by Business
Secretary John Hutton today. He also announced publication of a
consultation on the legislative framework for CCS, including
carbon capture readiness.
Proposals in today's consultation document on carbon capture
readiness are designed to create a more consistent understanding
of what this means across the EU. The proposals mean that the
carbon capture readiness of new combustion power stations will
have to be addressed by developers in the design process and taken
into account by the Government in deciding whether or not to
consent to such stations.
CCS has the potential to capture up to 90% of damaging carbon
emissions from coal fired power stations. The steps that we are
taking to prepare for and support the deployment of CCS
technologies are part of a wider strategy to reduce emissions from
electricity generation - which include the expansion of renewable
energy, a decision to allow investment in nuclear new build and
capping emissions from the power sector through the EU ETS.
BP Alternative Energy International Limited, EON UK Plc, Peel
Power Limited and Scottish Power Generation Limited were selected
from nine contenders based on their responses to the
pre-qualification questionnaire, submitted to the Department for
Business at the end of March.
Discussions in the next phase of the competition between the
Government and the four bidders will cover technical, commercial,
contractual and financial issues. The project continues to be on
course to be operational by 2014 - making the UK one of the first
countries in the world to demonstrate CCS on a commercial-scale.
Energy Secretary John Hutton said:
"Alongside nuclear, renewables and gas, coal is and will
continue to be a feature of the UK's electricity mix. The
progress we are making with the CCS demonstration competition and
on developing a sound legislative and regulatory framework will
help to deliver our ambition to see CCS ready for commercial
deployment by 2020. We have received an excellent response from
industry to this competition - indicating their commitment to the
clean energy agenda.
"We cannot deliver wide-scale deployment of CCS, nor tackle
global climate change, alone. We need greater international
collaboration and will continue to urge other countries to
demonstrate a similar level of commitment to demonstrating CCS as
the UK. We must ensure CCS is recognised in the EU Emissions
Trading Scheme and the Clean Development Mechanism, and have been
pushing hard for it to be high on the agenda at the forthcoming G8
Leaders meeting."
The consultation document published today - "Towards Carbon
Capture and Storage" - sets out the Government's view on
CCS as a 'high potential' carbon abatement technology
and asks for views on what more can be done to promote, develop
and deploy CCS in the UK, EU and globally.
The document outlines the proposed EU CCS Directive and invites
consultation on:
* the principle of carbon capture readiness
* the regulation
of CO2 storage
As part of the Government's commitment set out in the Energy
White Paper, the consultation seeks views on the definition of
carbon capture readiness (CCR) proposed in the EU draft Directive.
It describes and seeks views on:
* what CCR means and to which combustion plants it should
apply
* whether CCR should be addressed by developers when
designing new combustion plant and be taken into account by the
regulatory authorities when deciding whether or not to consent to
such plant
* how any such requirement would be incorporated
into the consenting process under section 36 of the Electricity
Act 1989 in England and Wales
The UK is a leader in driving forward the deployment of CCS
technology. In addition to the UK's commercial scale CCS
demonstration competition the Government continues to support a
number of small-scale carbon abatement projects, including R&D
and was recently confirmed as the host for the high profile Carbon
Sequestration Leadership Forum Ministerial Conference in 2009.
Notes to editors
1. The Government is committed to shifting the UK towards lower
carbon energy options through pressing ahead with a renewable
energy strategy, inviting operators to consider nuclear as an
option for new energy generation, pursuing a number of energy
efficiency measures and through commitment to carbon abatement
technologies such as CCS. The draft Energy Bill currently before
the House aims to develop the UK framework for a diverse,
sustainable and low carbon energy mix.
2. Fossil fuels will continue to play a vital role in providing
the UK with secure, reliable electricity for the foreseeable
future. Carbon capture and storage technology is currently the
only option available for making significant cuts in global
emissions from fossil fuel power stations - the International
Energy Agency (IEA) suggests that CCS technologies could
contribute up to 28% of global CO2 mitigation by 2050.
3. Given the participation of the electricity generating sector
in the EU ETS, new coal power plants will have no impact on net
emissions from industries covered by the whole scheme. Total
emissions are set by the EU ETS cap, and the UK, as an individual
Member State, can only affect the composition, not the level of
total emissions. We support the EU's proposal for the EU ETS
cap to get progressively tighter year on year from 2013,
continuing beyond 2020, setting a clear pathway towards our long
term emissions targets. By 2020, the cap would be 21% below 2005
reported emissions levels.
CCS Demonstration Competition
4. The UK CCS competition will support a demonstration of the
full chain of CCS technologies (capture, transport and storage) on
a commercial scale coal fired power plant. It was launched in
November 2007. The selected project should capture 90% of the CO2
emitted by the equivalent of 300-400MW generating capacity.
5. The Government selected post-combustion capture on coal for
the demonstration project as it is most likely to have the biggest
impact on global CO2 emissions and because it can be retrofitted
once the technology has been successfully demonstrated at a commercial-scale.
UK CCS Consultation
6. There will be a 12-week consultation period for the
consultation document - "Towards Carbon Capture and
Storage". A copy of the consultation document can be found on
the Department for Business website.
7. In January 2008 the European Commission published a proposal
for an EU Directive on the geological storage of carbon dioxide
(the draft CCS Directive).
8. As well as setting out proposals for an EU regulatory
framework for the storage of carbon dioxide and a number of
related points on safety, the draft CCS Directive also makes
proposals in relation to carbon capture readiness (Article 32).
These relate to designing new combustion power stations of 300MW
electrical or more so that carbon capture plant could be
subsequently fitted, and undertaking assessments about
transporting and storage of captured carbon dioxide.
9. Subject to the views in the response to the consultation, the
Government is minded to support the EU proposals in Article 32.
The consultation explores what the proposals should mean in
practice and how they could be most effectively implemented in
England and Wales
10. The Energy Bill currently passing through parliament aims to
establish a legal basis for licensing offshore carbon dioxide
storage and in co-operation with Scottish Ministers, the
consultation covers the Government's proposed offshore
regulatory regime for the storage of CO2.
11. Negotiations on the CCS Directive have commenced and it is
anticipated the Directive will be adopted before May 2009.
Consenting England and Wales power stations
12. The Government will continue to process power station
applications and decisions will continue to be taken under Section
36 of the Electricity Act 1989. The applicants for the only
coal-fired application with the Department for Business have
requested a decision be deferred until the consultation is complete.
Carbon Sequestration Leadership Forum (CSLF)
13. The Carbon Sequestration Leadership Forum is an international
climate change initiative that is focused on development of
improved cost-effective technologies for the separation and
capture of carbon dioxide for its transport and long-term safe
storage. The purpose of the CSLF is to make these technologies
broadly available internationally; and to identify and address
wider issues relating to carbon capture and storage.
14. The Department for Business Enterprise and Regulatory Reform
helps UK business succeed in an increasingly competitive world.
It promotes business growth and a strong enterprise economy, leads
the better regulation agenda and champions free and fair markets.
It is the shareholder in a number of Government-owned assets and
it works to secure, clean and competitively priced energy supplies.