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UK cancels pioneering £1bn carbon capture and storage competition

UK cancels pioneering £1bn carbon capture and storage competition

30th November 2015

The UK government has cancelled its £1bn competition for carbon capture and storage (CCS) technology just six months before it was due to be awarded.

The development was announced in last week’s Spending Review, and broke a pledge in the Conservative party’s election manifesto. Two projects had been in the running to build plants demonstrating CCS at commercial scale. One was backed by Shell and SSE at Peterhead. The White Rose consortium was based at Drax, the UK’s largest power plant, but was in trouble after Drax halted its investment in September.

CCS traps the carbon dioxide from coal and gas power plants and buries it underground so it cannot warm the climate. The UN’s Intergovernmental Panel on Climate Change concluded CCS is hugely important to tackling climate change in the most cost-effective way. Without CCS, the costs of halting global warming would double, the IPCC said.

The UK government’s own advisors, the Committee on Climate Change, agreed and said in October: “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.”

Luke Warren, chief executive of the CCS Association said: “This is devastating. Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business. It is a real blow to confidence for companies investing in CCS. This technology is critical for the UK’s economic, industrial and climate policies.”

The Chancellor, George Osborne’s autumn review and comprehensive spending review also cut spending on home energy efficiency by £132m - an 83% reduction. Improved energy efficiency of buildings is seen as a vital part of any decarbonisation strategy. Another £700m - 40% - was cut from a scheme supporting green heating.

The chancellor did, however, announce a doubling of investment in energy research and technology over five years. He singled out mini nuclear reactors - called small modular reactors (SMRs) - as a promising technology for the UK.