CCS: Its beginnings, cuts and future...
By Judith Shapiro; Policy and Communications Manager at The Carbon Capture and Storage Association (CCSA) @The_CCSA
When we look back over the history of Carbon Capture and Storage (CCS) in the UK, it seems that this technology was never meant to have an easy ride. In 2007, BP were developing a commercial-scale CCS project at Peterhead – however the Government launched a CCS competition the same year that specifically excluded the CCS technology that BP were proposing to use. The 2007 CCS competition ran until 2011 but failed to deliver an operational project. Thankfully, the Government were quick to launch a new competition at the beginning of 2012, this time focussed on the outcome of delivering commercial-scale CCS projects that would be cost-competitive with other low-carbon technologies in the 2020s.
But on the 25th November last year, the Government announced to the London Stock Exchange that “the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available. This decision means that the CCS Competition cannot proceed on its current basis.”
To say this came as a complete shock to the CCS industry would be a gross understatement. Particularly as the two competition projects were only a few weeks away from submitting their final bids, but also because the Government had committed to the £1billion in its manifesto with several affirmations in the months following.
One could be forgiven for thinking that this spells the end for CCS in the UK. However, this is not the case – we are still here and we are still fighting. There has actually been quite a buzz of activity since the start of the new year; the new All Party Parliamentary Group (APPG) on CCS held a meeting on the 19th January with the Energy Minister Andrea Leadsom. The day after, the Energy and Climate Change Committee held a one-off evidence session on the future of CCS in the UK – with witnesses from the Carbon Capture and Storage Association, the UK CCS Research Centre, the environmental NGO E3G, Tees Valley Unlimited and Capture Power. And on the 25th January, a number of external stakeholders joined forces in a letter to the Prime Minister, setting out their dismay and concern regarding the decision to withdraw funding from the CCS competition. This letter shows that there is unique agreement between the CCS industry, environmental NGOs, energy intensive users, the TUC and electricity generators on the importance of CCS. Coincidentally, the Committee on Climate Change published a letter the same week on the implications of the Paris Agreement for the fifth carbon budget – emphasising again the crucial role of CCS in meeting the UK’s climate change targets at least cost and recommending that the Government needs to “develop urgently a new approach to CCS in the UK”.
So where do we go from here? Well first and foremost, a priority must be to rebuild investor confidence in the CCS industry, which has been severely damaged by the decision on the 25th November. The UK now needs to salvage value from the competition and seriously re-think its ambitions for CCS. We heard from the Energy Minister Andrea Leadsom that a new CCS strategy will be published in a matter of months – let’s hope that this strategy gives a new lease of life to CCS in the UK.
For more discussion on CCS you can read 'Going Underground'. A blog from the CCSA.
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