House of Commons - Science and Technology

Select Committee on Science and Technology First Report

7 ROLE OF CCS IN THE UK'S FUTURE ENERGY PORTFOLIO

148. One of the key tasks for the Energy Review is to consider the relative roles of fossil fuels, nuclear energy and renewable technologies in the UK's future energy mix. The availability or otherwise of CCS technology must play a vital part in influencing this balance. This chapter explores the relationship between CCS and renewables and CCS and nuclear energy, as well as considering timescales for decision making.

149. The timing of the Energy Review is striking, not least because it comes so soon after the 2003 Energy White Paper. In an article in The Observer, Energy Minister Malcolm Wicks described the factors that, in his view, rendered today's situation "a very different world from just three years ago":

"Faster-than-expected North Sea decline, global oil prices rising by 50 per cent in just three years, hardening of the scientific consensus around climate change and, with 30 per cent of the UK's generating capacity set to close by 2020, critical investment decisions on new capacity fast approaching".[

247

The Minister drew particular attention to the UK's increasing dependence on imported gas, commenting that "We would be more exposed to the risk both of natural disasters like [Hurricane] Katrina and political instability in distant producer countries. And the chances of us achieving our ambitious 2050 carbon emission targets would be seriously threatened".[248] We accept that there have been significant developments of relevance to energy policy in the last three years, but we also believe that many of these could have been anticipated in 2003. 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. The scope for CCS to contribute to securing UK energy supply is discussed in paragraph 156.

150. In view of the complexity of energy policy and the wide-ranging remit of the Energy Review, we were surprised at the short time—barely six months—allocated for consultation and analysis of the evidence. The Minister acknowledged that this represented an "enormous challenge" but assured us that the allocated time would be sufficient to address all the key questions—we look forward to an announcement later this year.[249] At the launch of the Energy Review Consultation Document in January 2006, the Government announced that it had asked the Health and Safety Executive (HSE) to "report on some specific potential health and safety risks arising from recent and potential energy developments and on the HSE's approach to ensure that risks arising from these are sensibly managed by industry".[250] The HSE has been given 18 months to report. 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.

CCS AND RENEWABLES

151. One of the factors underlying the conditionality of environmentalists' support for CCS is the concern that it will, in the words of the Environment Agency, "unnecessarily prolong our dependence on fossil fuels, which is counterproductive for the environment overall" and "distract effort from more cost-effective, immediate and proven solutions".[251] Doug Parr, the Greenpeace chief scientist, made a similar point: "the pursuit of this technology [CCS] is a distraction from the real priorities of implementing renewable energy and energy efficiency technologies which are available right now".[252]

152. Numerous other witnesses argued that these concerns were overridden by the fact that fossil fuels would be an inevitable and essential part of the energy mix for the foreseeable future (both in the UK and abroad) and CCS could limit the damage inflicted through burning them. Rodney Allam from Air Products commented: "We certainly cannot sustain our economy or our way of life without burning fossil fuels, which are providing 70 per cent of our total energy requirements in this country and similar amounts in other countries".[253] Jim Penman from DEFRA also told us: "The thing to bear in mind is that fossil fuels are going to be used in future probably whatever happens", emphasising that "This is not a zero-sum game and [CCS] is a classic transition technology".[254] The Minister Malcolm Wicks said that he had a "lot of sympathy" for those concerned about CCS encouraging reliance on fossil fuels at a time when the world should be moving away from burning them. However, he then went on to say that opposing CCS on this basis was "ideology gone mad".[255] Whilst we wouldn't necessarily endorse the Minister's choice of words, we support the sentiment. 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.

153. Another argument that has been made to justify preferential investment in renewables is that CCS only decreases the increase in emissions resulting from fossil fuel combustion (albeit by around 85%) rather than eliminating them altogether. However, others have pointed out that CCS has the potential to produce negative net emissions. This could be achieved by fitting biomass-fired plant with CCS. Energy generation from biomass is considered to be carbon neutral (due to the CO₂ absorbed from the atmosphere as the biomass grows), therefore adding CCS would, in effect, remove CO₂ from the atmosphere. This possibility was highlighted by, amongst others, UKCCSC:

₂

256

It should be noted that recent reports have drawn attention to the limitations of biomass, even suggesting that in some circumstances it may cause more harm than good to the environment overall (e.g. due to negative impacts relating to land use).[257] 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.

154. It is also important to consider the overall scale of reductions that could be generated by CCS and renewables in the near term. Dr Riley from the BGS commented that the avoidance of CO₂ emissions that would be provided by BP's Miller project (1.3 million tonnes CO₂ per annum) would be "about the same [CO₂ emissions] avoidance as all the entire wind farm installed capacity we have at the moment for the UK".[258] In fact, this may be a slight overestimate but it is certainly true that, if successful, the scale of emissions reductions that the DF1 project would deliver would be comparable to the reductions achieved by all the onshore wind farms in the UK in 2005. Thus, CCS could play a vital role in helping the UK get back on track to meet its 2050 target to reduce CO₂ emissions by 60% compared with 1990 levels.

155. 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. These will still be essential, particularly for the longer term. Irrespective of the role played by CCS, the availability of, for example, market-ready mass scale tidal or wave energy technology would be of enormous value and investment in these technologies must continue.

CCS, NUCLEAR ENERGY AND SECURITY OF SUPPLY

156. One of the main purposes of the Energy Review is to explore the possibility of new nuclear build.[259] Dr Jon Gibbins argued that CCS had far more to offer than nuclear in terms of reducing CO₂ emissions:

260

Others have backed CCS precisely because it offers an alternative to nuclear energy and, as such, is perceived to be the lesser of two evils. Friends of the Earth, for instance, asserts that CCS is "a far preferable approach to the possible alternative of nuclear power, which is also put forward by some groups as a bridging technology".[261]

157. It is frequently asserted that nuclear energy is key to securing and diversifying UK energy supply. We were interested to hear analogous arguments put forward for CCS. Brian Morris, for example, told us that CCS "gives you an opportunity for diversity of supply" by enabling the use of coal, gas, oil or biofuel mixtures sourced from a range of geographical and political origins.[262] Kenneth Fergusson, President of the Combustion Engineering Association, has also argued that underground gasification of unmineable coal seams in conjunction with CCS could provide the UK with substantial amounts of low carbon energy from a domestic fuel source.[263] However, substantial additional research and development is likely to be needed to ensure that underground gasification is reliable and commercially viable. Others pointed out that EOR could prolong the life of the North Sea oil fields.[264] Gardiner Hill from BP argued that CCS "has the potential to extend the useful aspects of the North Sea" through creating employment and opportunities for EOR, thus adding to the diversity and enhancing security of energy supply for the UK.[265] 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.

158. The Government's Chief Scientific Adviser has repeatedly argued that the UK will need "every tool in the bag" in order to meet its energy and climate change mitigation objectives.[266] It remains to be seen, however, whether the Government will be able to provide a framework to persuade industry to invest in renewables, nuclear and CCS. Professor Gordon MacKerron, Director of Sussex University Energy Group and chair of the Committee for Radioactive Waste Management, has raised the possibility that a Government commitment to nuclear could deter gas and renewable energy suppliers from investing which could, if not all the expected nuclear plant was built (as has happened in the past), leave the UK with an energy shortfall.[267] According to Professor MacKerron, even if new nuclear build was approved and commissioned, the first power from a new reactor would not be produced before 2018 or, "more likely", 2020.[268] The Secretary of State for the Environment, Food and Rural Affairs, Margaret Beckett, has also been reported as saying that any new nuclear build would not be producing energy by 2020.[269] By contrast, both BP and Progressive Energy have stated that they are capable of building industrial scale demonstration plants using CCS starting today, with the first electricity being produced within four years.[270] This would seem to support the argument that early build and demonstration of CCS plant in the UK could lead to CO₂ emissions reductions more rapidly than investment in nuclear. Demonstration of CCS could also deliver the additional benefit of providing an entry point for reducing the far more substantial emissions from China and India.

159. In informal discussions, one of the major UK energy suppliers admitted that one of the most difficult questions facing the company was whether CCS and nuclear could be pursued in parallel, presumably due to the levels of investment and expertise required for each. It is also worth noting that most of the costings for both nuclear and gas- or coal-fired plant fitted with CCS assume that the plant will be base-load generation plant.[271] There is a finite demand for base-load plant on the grid (in the order of 15-20 GW) so it would probably not be possible for both types of plant to operate as such. This means that either CCS-fitted plant or nuclear would need to bear the additional penalty of running at lower levels of generation, which could impact on their commercial viability. The Government must take these limitations into account when considering the respective roles of nuclear and CCS in the UK's future energy mix.

Timescales

160. The UK is faced with a significant opportunity to take a lead in demonstrating CCS technology and, as discussed in chapter four, the rewards on offer could be considerable in both domestic and global terms. However, time is of the essence if the UK wishes to capitalise on this opportunity. This reflects the fact that:

The greatest benefits would be derived by the UK if it takes a lead in demonstrating CCS technology;

Export opportunities depend on full scale demonstrations of technology in the UK. These need to start now, to provide industry with the confidence to make medium term decisions (e.g. industry decisions are required by 2010 for plant to come on-line by 2015);

Industry needs a long term price signal, as well as an indication of the framework for strategic regulation and ownership, before serious investment will occur;

Decommissioning of the UK electricity generation fleet is underway, and will reach 30% by 2020;

Decommissioning of the North Sea oil and gas fields is underway and the infrastructure is being removed;

There is a need to prove that the amount of stored CO₂ can be verified and that there is no significant risk of leakage, both of which will take time to do; and

There is an increasing sense of urgency over the need to meet emissions targets as a result of emerging scientific evidence on climate change and ocean acidification.[272]

161. We were therefore disappointed to discover that the Government considered CCS to be a technology primarily of long term significance. Brian Morris, the DTI's Head of Carbon Abatement Technologies said in oral evidence:

273

The Energy Minister, Malcolm Wicks, also repeatedly referred to the fact that CCS was at a very early stage and, when asked about timescales, was less than ambitious: "I would very much hope that into the next decade we would have seen a major demonstration project, the most likely one is the Miller field BP project and after that I would hope there would be other fundamental developments, but it is too early to be entirely confident about that".[274] 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. Brian Morris rightly stated that "We have got to be doing the work today to enable [CCS] technologies to be there by 2020".[275] 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.

162. In oral evidence, the Minister told us: "One thing I have learned, if I needed to learn it, is that in energy policy, where we have got targets on emissions which go up to 2050 and where we need to make judgments now which will influence energy policy and therefore climate change maybe for much of this century […] we need long-term certainty and industry need long-term certainty".[276] We are heartened to hear this and hope that the Minister will now put his lesson into practice. 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.

247 Malcolm Wicks MP, Grasping the nuclear nettle, The Observer, 4 December 2005. Back

248 As above. Back

249 Q 352 Back

250 DTI, Our Energy Challenge: securing clean, affordable energy for the long-term, Energy Review Consultation Document, January 2006. Back

251 Ev 94 Back

252 Ministers back carbon dumping, The Guardian, 15 June 2005. Back

253 Q 109 Back

254 Q 12 Back

255 Q 261 Back

256 Ev 146 Back

257 European Environment Agency, How much biomass can Europe use without harming the environment?, EEA Briefing 02, 2005. Back

258 Q 69 Back