Examination of Witnesses (Questions 260
- 279)
WEDNESDAY 14 DECEMBER 2005
MALCOLM WICKS
MP, MS BRONWEN
NORTHMORE, MR
BRIAN MORRIS
AND DR
GEORGE MARSH
Q260 Chairman: Encouraged, Minister!
Malcolm Wicks:—that I am
very enthusiastic as a lay person, as opposed to being an engineer
or a scientist, about carbon capture. If we get this right and
the feasibility studies, et cetera prove the hypothesis that this
is an important development then one or two large schemes can
do an enormous amount of good work in terms of capturing CO2 compared
with one wind turbine. My judgment on this is that we have still
got to talk about energy supply. The electricity needs to come
from somewhere. On renewables, as you know, we have a 10% target,
in other words 10% of our electricity should come from renewables
by 2010. At the moment we have what we call an aspiration because
it is too soon to set a target that could be 20% by 2020. We having
something called the renewables obligation whereby we require
the energy suppliers to source some of their energy from renewables.
I think that shows our commitment.
Q261 Dr Harris: What do you say to
those people who say that investment in carbon capture and storage
does not do anything to wean us off reliance on fossil fuels,
in fact it encourages reliance on fossil fuels, where we need
to have a change in our approach and recognise in the long term,
arguably the medium term, we need to do everything we can to move
away from burning these things?
Malcolm Wicks: I have a lot of
sympathy for that. I know it has led to at least one of our environmental
organisations being rather agin the idea of carbon capture. I
think that is ideology gone mad myself. Two things are true. The
world is going to be burning lots of fossil fuels for a century
or more, not least in China but here as well and, like it or not,
that is what is going to be happening. That is where these technologies
really come into their own and why I am enthusiastic about them.
We also need alternative sources and fundamentally cleaner sources
of energy hence our commitment to renewables and the need to drive
forward on energy efficiency.
Q262 Dr Iddon: You mentioned the
agreement with Norway a few minutes ago. What benefits does that
bring to Britain in improving opportunities to invest in the North
Sea?
Malcolm Wicks: Do you mean the
practice in Norway and the Sleipner project?
Q263 Dr Iddon: Britain has signed
a recent agreement with Norway.
Malcolm Wicks: That is right.
I am enormously encouraged by that. We share the North Sea with
Norway, that is the obvious link there. We are also going to be
quite dependent on Norway for gas with the Langeled pipeline coming
in in a year or so's time. Norway is rather ahead of the game
in terms of these technologies. It is the Sleipner project which
has stored one million tonnes per year of CO2 since 1996. The
scientists are studying that very well. At the moment I am advised
that geologically the CO2 is behaving as they would expect, namely
it is still there, it has not done anything naughty. That is almost
the most important demonstration project that we have got.
Q264 Dr Iddon: So it is a transfer
of technology and knowledge.
Malcolm Wicks: Absolutely, I think
so. I met the still quite new Energy Minister Odd Roger Enoksen
on two occasions in his early months of ministerial life and we
have had some serious talks about this. We decided together that
we wanted to move ahead, not just to talk but to see what issues
there were for collaboration and we have signed a Memorandum of
Understanding that the two governments and therefore the industries
in both countries will work together. Quite where that will lead
I cannot say, but I am very encouraged by that development.
Q265 Dr Iddon: Did this agreement
cost us anything financially?
Malcolm Wicks: No, just a little
ink.
Q266 Dr Iddon: Sir David King has
been quoted as saying that CCS is the only way forward for the
world since China and India are inevitably going to continue burning
their coal reserves. Do you agree with Sir David King's statement
that this is the only way forward?
Malcolm Wicks: Yes, I think I
do in principle for reasons we have said, that whatever alternatives
might develop renewables, we are going to be burning fossil fuels
and China is the example par excellence and therefore I think
he is right, that if we can get this right it is the only way
forward.
Q267 Dr Iddon: You have talked about
discussions with China earlier, not with India. Have you entered
into discussions with India because they are already burning fossil
fuels on quite a large scale?
Malcolm Wicks: We hope to sign
an agreement before Christmas with China. We are also in close
touch with India. There have been discussions during our presidency.
Mr Morris: We have engaged with
India on this issue. There is slightly less enthusiasm to talk
about these technologies with India than there is with China.
That is not to say we are giving up with India but rather we are
still trying to engage India. It is just that China has responded
far more positively than India has on these approaches.
Q268 Dr Iddon: Is India or China
showing significant interest in the other technologies which have
been mentioned, like photovoltaics? They have got sunshine like
the rest of the world. Or do you think our encouragement for them
to invest in CCS, because we will export the technology to them,
is dragging them in the fossil direction rather than in the other
directions of energy supply?
Malcolm Wicks: The key development
in China is they have so much coal, that is the reality. They
are a developing country and they are going to burn coal. They
are anxious to burn it as cleanly as possible. The Chinese Government
is fully aware of the climate change imperatives here. With the
agreement we are going to sign on behalf of the EU we hope to
further that. When I meet those from China I am made very aware
that they are with us on the challenge here. We are not quite
at that stage with India. Biomass, for example, is very important
in terms of energy supply in India, so there are different issues
there.
Q269 Dr Iddon: Do you think that
the UK can lead the world in CCS development and export our technologies?
Malcolm Wicks: I think we need
to be cautious in our rhetoric about leading the world. We can
become one of the world leaders, yes. We are learning from Norway.
There are developments in the States which are interesting. I
think we are there and I am pleased we are and we need to make
sure we are because not only have we put climate change centre
stage in terms of the agendas that count across the world, ie
the G8, the EU and the UN, but also, frankly, there should be
an opportunity here for the British business sector and for our
manufacturing economy. If we can get this right within our shores
then I think there is enormous export potential.
Q270 Dr Iddon: How can you say that
we are there when we have not demonstrated that we can do it yet
on a large scale in this country?
Malcolm Wicks: I think we are
there intellectually and scientifically, technologically and politically.
In terms of large scale demonstrations, apart from the Norwegians
and one or two bits and pieces no one is quite there yet.
Q271 Dr Turner: I think it is quite
clear to everybody that CCS cannot afford to fail in terms of
China and India and other large scale CO2 producers. What advice
have you been given and what messages do you get from the Chinese,
for instance, as to the final practicability of carbon capture
in dealing with the whole problem in terms of the geological storage
capacity, because if there are not sufficient geological formations
in China, India and wherever stores CO2 then the great project
will not work?
Malcolm Wicks: I think I need
to defer to one of my expert advisers on this.
Dr Marsh: That is right. There
has been some preliminary analysis both with India and China that
would indicate that there ought to be the capacity, but part of
the MoU work, the £3.5 million, will be used to commission
a more detailed geological study to map the sources in relation
to where it might be stored.
Q272 Dr Iddon: Obviously some of
the developing countries will need significant energy production
in the not too distant future. Do you think that those countries
can afford to invest in technologies like carbon capture and storage?
Malcolm Wicks: Certainly at the
moment we are talking about, as I understand it and common sense
dictates, a pretty expensive technology both in terms of the investment
that is required but also the costs that it adds to the price
of fuel. Although I think it is difficult to give precise estimates,
we have had a go at giving our own estimate. I think we have to
be realistic at the moment and say this is fairly new stuff. Initially
and maybe in the longer term it is expensive and probably there
are not a huge proportion of nations at the moment who can afford
it. We need to remember that in South America, for example, there
is a huge interest in biomass and indeed biofuels. We should not
put all our eggs in one energy basket.
Q273 Chairman: You said in your supplementary
evidence to us that the cooperation goals include the aim of developing
and demonstrating in China and the EU advanced near zero emissions
coal technology through carbon capture and storage by 2020. That
seems to be an awful long way away. By 2020 will not the damage
to the environment be such that we will have missed the boat?
Why in 2020?
Malcolm Wicks: In a way I share
your frustration because it seems to me in very simple terms that
the world is now engaged in a mighty race. I think the serious
scientific community knows where the climate is going in terms
of temperatures. I think the world is actually behind in this
race at the moment in terms of developing policies and behaviours
and technologies to enable us to overtake and win this climate
change race. For me to be absurdly over-optimistic about the utilisation
of these technologies when at the moment we have so few demonstration
projects I think would be naive. I hope we can press ahead just
as quickly as possible. I think the Miller field project with
BP, if it goes ahead, as we all hope, will be slightly ahead of
the game in terms of that timescale. We will need to consider
this over the next few years. I think to suggest that this is
a technology which can be spread globally relatively quickly is
probably naive, sadly.
Q274 Chairman: I think my frustration
is that if Britain does not demonstrate and does not invest in
a significant demonstration plant probably within the next decade
then the idea of us being able to export that technology around
the world becomes less and less tenable as an argument.
Malcolm Wicks: I agree with you
and this is why it is at the heart of the Energy Review.
Q275 Mr Flello: The Pre-Budget Report
committed a very welcome additional £10 million to Carbon
Abatement Technology demonstrations. Can I ask how the figure
of £10 million was arrived at? Could you give an indication
as to why it was not included in the original £25 million
committed under the DTI's CAT Strategy back in June? Why was it
announced just after announcing the Energy Review?
Malcolm Wicks: If it helps the
Committee, in a moment I might ask one of my colleagues to give
an indication of the kind of projects that we might be able to
back with the money that we do have available. I do not think
I have a very clear answer on this. The original tranche of money
was £25 million plus a further £15 to help develop ideas
around hydrogen. I know that is not the subject today but the
Committees might want to note that. We were very pleased indeed
that the Chancellor was able to allocate some additional money
this year. I think that is as far as I can go on these matters.
Dr Marsh: The original Carbon
Abatement Technology Strategy indicated that the £25 million
could be used either to demonstrate "capture ready"
or to take forward some small scale demonstration of CO2 storage.
It recognised that that money was not in the right ballpark to
fund a full scale demonstration. The extra £10 million basically
frees our hand to look a little bit more broadly at perhaps more
than one such project or to make one a bit bigger than it otherwise
would be. We always recognised that the money was to put UK industry
on the playing field and that it would put them in a position
to leverage additional money from other funding sources such as
the European Commission. I see it as strengthening that position.
Malcolm Wicks: It may be that
we can help demonstrate CO2 "capture ready" plant which,
as we saw in the China context, is very important.
Q276 Chairman: Is this not a piecemeal
approach rather than having some long-term funding goal?
Dr Marsh: No.
Q277 Chairman: Are you not just going
from one thing to another and throwing a few bits in here?
Dr Marsh: The strategy was always
to acknowledge that industry has a better oversight of what it
is capable of exploiting and how it wants to develop. We have
given illustrations as to how that money might be used, but the
call will leave it open to industry bidders to say how best they
think they can use those funds.
Q278 Mr Flello: How do you feel the
£35 million stacks up against the United States' commitment
of $0.5 billion for future clean coal projects? Do you think that
we are in the same sort of league at all with the Americans, for
example?
Malcolm Wicks: I think it is probably
rather difficult to compare the two countries because generally
on climate change, as you know, the European Union is developing
the Emissions Trading Scheme, for example, whereas in the United
States certain individual states are very interested in that kind
of scheme but there is no equivalent federal programme. I am happy
about where we are at the moment, but I am even happier that we
have mechanisms now, not least the Energy Review, to address these
issues very fundamentally.
Q279 Mr Flello: In terms of ensuring
that a plant is built in the UK perhaps with European funded money,
what pressure is being put on to try and get a CCS demonstration
plant within the UK as opposed to somewhere else within Europe?
Malcolm Wicks: As we have said,
the frontrunner at the moment is the Miller field project. It
seems to me that BP and their partners are ideally placed there.
We do have this natural resource of the North Sea which, if we
can demonstrate effectively, as I am rather confident we can do,
is a natural storage area for CO2. I think we have put a lot of
emphasis on this. With the monies that we have, the £35 million
now, I think we can demonstrate other technologies with partners
including this idea of how we make plant "capture ready".
I think that is very important.
Mr Morris: The EU recently launched
a technology platform into a zero emission fossil fuel power plant.
The UK is actively involved in that. I chair the Mirror Group
within this initiative. We have also British industrialists in
the coordination group, we are very involved in that and we do
see the EU work as very central to try and focus on technologies
relevant to Europe, it would be a way of sharing resources. So
we see the EU area as a very important area.
Malcolm Wicks: The recent EU OPEC
summit meeting in Vienna which I chaired for the EU because of
our presidency I think was very encouraging in enabling a dialogue
to take place between ourselves and the oil producers about all
of the climate change and carbon capture issues and there was
agreement that we should move towards establishing a technology
centre on this which will be in Kuwait. That is a major step forward
because I rather imagined that 10 years ago you would not have
had that dialogue between producers and the consumers and I was
rather encouraged by that.
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