Public sector agency ‘needed to develop cheaper CCS schemes’

The immediate creation of a new, public sector delivery body to provide carbon dioxide-free electricity from fossil fuel power stations will cut the cost of meeting Britain’s climate change obligations by billions every year, according to a new report from the Parliamentary Advisory Group on Carbon Capture and Storage (CCS). The report: Lowest cost of decarbonisation for the UK says that a carbon dioxide pipeline network would also provide the means of reducing emissions from industrial sources and from the heating of more than 20mn homes.

In a report to Business, Energy and Industry Secretary Greg Clark, the Group sets out a plan to free the log-jam that has blocked the development of CCS. It also suggests that thousands of jobs would be created around CCS ‘hubs’, giving a huge boost to the economic regeneration of some of Britain’s oldest industrial centres such as Teesside and Grangemouth.

The Advisory Group claims that CCS technology is now ready to deploy at costs of £85/MWh over a 15-year period, significantly below the requirements for nuclear power and comparable to many renewable options. The price is half the amount that would have been needed to support the projects bidding in the CCS competition that was cancelled by the government last November on the grounds of excessive cost.

The Group proposes a new, publicly-owned CCS Delivery Company, similar in concept to the Olympics Delivery Authority or Crossrail, to kick-start the technology’s implementation. Its report calls for financial measures to support CCS based on the government’s existing contracts-for-difference scheme offered to renewable electricity providers. And it claims that climate change gains will also come from developing a carbon dioxide pipeline network to serve industrial facilities that have no other means of reducing emissions.

Noting that a quarter of Britain’s greenhouse gas emissions stem from heating and cooking, the report also proposes the creation of a Heat Transformation Group to assess options for decarbonising the UK’s heating systems, including the possible conversion of the country’s gas supply system from methane to hydrogen.

The Group’s report says that by 2030 some 15% of UK carbon dioxide emissions could be safely and permanently stored in the abundant geological formations off the coast of Britain. By 2050, CCS could be responsible for curbing as much as 40% of emissions, saving up to £5bn annually compared to alternative strategies.

The Advisory Group was established following the former Chancellor George Osborne’s shock decision to cancel the £1bn competition intended to promote CCS development. Projects to decarbonise a gas-fired power station at Peterhead and a new coal-fired plant at Drax in Yorkshire collapsed as a result.

The Group says it accepts the government’s justification that the project costs were too high, but insists that this was due to the design of the competition, arguing that massive savings in the cost of CCS implementation can be achieved if the government accepts that the public sector has a leadership role. While government financial support will be needed to drive forward these initiatives, the Advisory Group recommends the introduction in the longer term of a CCS certificates and obligation scheme. Suppliers of fossil fuels would eventually be required either to invest in the means of eliminating carbon dioxide emissions from their products or pay for the work to be done by others.

Chairman of the Advisory Group, Lord Oxburgh, said: ‘Government intervention and leadership is crucial,’ added Oxburgh: ‘The private sector is not institutionally capable of developing the necessary pipeline and storage network, and the role of the public sector will be crucial in the early years.’

• Tees Valley has been chosen by Edinburgh University as the location for a new CCS project to find the best method of capturing carbon dioxide from biomass-fuelled power plants – a mobile unit is working at the Sembcorp plant on the Wilton International site, Tees Valley.