CCS in the UK: Tits up and no one is a winner

Today George Osborne surprised everyone by announcing that the £1bn ring-fenced pot of cash for carbon capture and storage deployment in the UK was being scrapped with immediate effect as part of the Government’s spending review. Much has already been written this afternoon about the announcement, which I think seemed to catch everyone off guard.

BBC: UK government carbon capture £1bn grant dropped
The Guardian: UK cancels pioneering £1bn carbon capture and storage competition
Sky News: Government Scraps £1bn Carbon Capture Scheme
STV News: UK Government scraps £1bn fund linked to Scots carbon capture project
businesGreen: Government axes £1bn CCS competition in ‘devastating’ blow to industry
Energy Voice: Fury as Government pulls plug on £1billion CCS scheme
Bellona: UK Tosses CCS Leadership Aside and risks Europe’s deep decarbonisation
Scottish Carbon Capture and Storage: UK Government confirms £1bn for CCS Competition ‘no longer available’
Climate Home: UK scraps £1bn carbon capture fund in blow to green credentials

The removal of this fund effectively shuts down commercial scale CCS in the UK, with industry partners Scottish and Southern Energy and Shell criticising the Chancellor’s decision, which affects their planned full-scale gas-fired power plant and CCS project at Peterhead:

SSE believes this decision represents a significant missed opportunity for the UK. – Scottish and Southern Energy

[The Peterhead project] 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. – Shell

Another leading bidder for cash from the fund was the White Rose project in North Yorkshire, which has already suffered a blow when the power station (Drax) to which CCS would be fitted pulled out of the process, citing the government’s cutting of renewables subsidies. Their statement today includes:

…it is difficult to imagine its continuation in the absence of crucial Government support. – Leigh Hackett, CEO of Capture Power

In other words, CCS has gone tits up in the UK. And with it, our hopes of meeting our climate change targets by 2030. Prof. Jim Watson, Director of the UK Energy Research Centre, said:

The cancellation also leads to questions about the compatibility of recent energy policy announcements with the UK’s legislated climate change targets. 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.

The short-termist view from Mr Osbourne is that the Government can spend that £1bn more wisely, however the Government’s own Committee on Climate Change recently said:

CCS is very important for reducing emissions across the economy and could almost halve the cost of meeting the 2050 target in the [UK’s] Climate Change Act.

The EEF, the manufacturers’ organisation, also saying that CCS would save some £32bn per year in future mitigation. And not only would it cost us more to mitigate climate change in the future, but we are also in danger of, effectively, throwing away millions of pounds in research, training and investment in CCS.

The knowledge and skills developed will be rapidly lost; wasting the opportunity of making the UK a global leader in a critical low carbon technology. – Frederic Hauge, President of the Bellona Foundation

So industry loses out in expertise and experience, the economy loses out in future higher costs and lack of support for a global leading industry, and society loses out to higher costs and ultimately the drastic effects of climate change. No one is a winner.

 

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