Role of CCS in the UK's Future
Energy Portfolio
ENERGY REVIEW
55. The Government's decision to launch another
Energy Review less than three years after the publication of the
last Energy White Paper in 2003 must been seen as a tacit acknowledgment
that the previous White Paper did not foresee some of the key
issues. (Paragraph 149)
The reasons for the 2006 Energy Review were fully
explained in the consultation document published on 23rd
January 2006.
56. In view of the complexity of energy policy
and the wide-ranging remit of the Energy Review, we were surprised
at the short timebarely six monthsallocated for
consultation and analysis of the evidence. (Paragraph 150)
The debate around the issues being considered in
the Energy Review has been underway for some time. The Energy
Review is building on the work and the analysis undertaken for
the 2003 Energy White Paper and since then, and takes as given
the 4 energy policy goals set out in the 2003 White Paper. Further,
it is important that the Review is conducted in a timely fashion.
Key investment decisions that will decide our energy mix for the
long-term will be made by industry in the short-term.
57. We are concerned that the review being undertaken
by the Health and Safety Executive may be used by the Government
as an excuse for delaying concrete decisions about commitments
to CCS. This would be a major setback for the UK's progress in
this area and must not be allowed to happen. (Paragraph 150)
It is right and proper that the health and safety
risks associated with new energy technologies are properly understood
to inform the regulatory framework that should apply to these
technologies. The HSE has been asked to provide an expert report
on some of the health and safety risks associated with a number
of recent and potential developments in the energy sector and
their regulatory strategy to ensure that industry sensibly managed
these risks.
CCS AND RENEWABLES
58. The availability of CCS should not become
an excuse to deepen the world's dependence on fossil fuels as
energy sources. Nevertheless, it is clear that neither the UK
nor most other countries are yet willing or able to exclude fossil
fuels from their energy mix and, this being the case, CCS can
play a crucial damage limitation role during the transition to
alternative energy sources such as renewables. (Paragraph 152)
We fully endorse this conclusion, which is the central
thrust of DTI's CAT strategy.
59. The possibility of removing CO2
from the atmosphere by fitting biomass-fired plant with CCS is
highly appealing but further research is needed to ensure that
this approach will deliver the expected environmental benefits.
(Paragraph 153)
It is likely that plant fuelled with 100% biomass
will only be 50-100MW in capacity because of the logistics and
energy use associated with collecting and transporting biomass
over long distances. CCS on plant of this size is unlikely to
economic, except possibly if it is located close to other large
fossil fuel sources, and hence can take advantage of any CCS infrastructure
associated with such plant. An alternative approach to take advantage
of biomass would be to use this for co-firing in new or refurbished
fossil fuel plants that are also fitted with CCS. This would have
the added advantage of using the biomass at the high conversion
efficiencies attainable in advanced fossil plant. The DTI's CAT
Strategy included biomass co-firing within its remit for precisely
this reason.
60. CCS has the potential to make a dramatic impact
on carbon dioxide emissions in a short space of time and, given
current performance, it will be hard for the UK to meet its 2050
target on emissions reductions without CCS. However, CCS must
not be regarded as a substitute for developing renewable forms
of electricity generation or implementing energy efficiency measures.
(Paragraph 155)
The Government continues to place great importance
on the development of renewable energy sources and implementing
energy efficiency measures. This has been emphasised in the Energy
Review Consultation and in the new Climate Change Programme. Nonetheless
it is likely that a wider portfolio of measures will be needed
to achieve our aims for CO2 abatement. As discussed
in the DTI's CAT Strategy CCS technologies should be regarded
as bridging technologies giving short to medium term reductions
in CO2 emissions, and thus providing more time for
the development of truly sustainable energy technologies.
CCS, NUCLEAR ENERGY AND SECURITY OF SUPPLY
61. CCS can contribute to security of supply by
enabling the UK to utilise a range of fuels from diverse sources
and suppliers, without impairing progress towards CO2
emissions targets. (Paragraph 157)
This is undoubtedly true for CCS applied to coal
fired plant. It is noteworthy that all the main groups of energy
technologies currently considered for CO2 abatement,
renewables, energy efficiency and nuclear power, would contribute
security of supply.
TIMESCALES
62. We are disappointed by the Government's repeated
assertion that CCS technologies are at a very early stage and
are concerned that this is being used as an excuse for inaction.
If the Government were to demonstrate the ambition and determination
that we believe is merited, the UK could significantly progress
the status of CCS technology and perceptions of its viability.
(Paragraph 161)
The Government is far from inactive on CCS. The DTI's
CAT Strategy, providing funding for R&D and demonstration
projects shows significant commitment, the UK has been prominent
in addressing the legal and regulatory issues affecting CCS deployment
in the EU and under the marine treaties, and we have been instrumental
in initiating work to prepare for CCS deployment in developing
countries such as China and India.
The key issue is how to take the next steps in the
development of CCS. As discussed in several previous responses
above, this is not an easy question to answer. Full-scale demonstration
projects, to use the Committee's own findings, are likely to be
very expensive and of uncertain cost, and currently there are
several options being proposed with equal enthusiasm by potential
developers covering coal and gas, post and pre-combustion, storage
and EOR. We need to consider what is most appropriate to the UK
in terms of deployment, the capability of UK business, the suitability
of the technology to other key markets, where our effort should
fit into the broader international scene and the impact on consumers
and taxpayers. In addition it is clear that other non-financial
barriers, such as regulation, may affect the development of CCS.
These questions are being considered in the HMT consultation,
which will feed into the Energy Review.
63. Regrettably, the Government's actions to date
do not reflect the urgency of the situation. We trust that this
will be rectified during the forthcoming Energy Review. (Paragraph
161)
We do not accept that the Government is not making
decisions concerning CCS in a timely manner. As explained above
(Paragraph 62) the issues associated with the development of CCS
are complex and need to be carefully considered in light of the
Government's overall objectives for energy policy. The Energy
Review is an opportunity to consider these issues in this broader
context.
64. One of the top priorities for the Government
must be to develop the long term and coherent energy policy which
has been sorely lacking to date. It is essential that, following
the Climate Change Programme Review, Energy Review and Stern Review,
the Government puts in place a stable incentive framework that
will enable industry to find the most cost effective technological
solutions to meet the UK's energy and climate change objectives.
(Paragraph 162)
The Government notes the Committee's comment.