Examination of Witnesses (Questions 500
- 510)
WEDNESDAY 27 JANUARY 2010 (morning)
MR SARWJIT
SAMBHI, DR
KEITH MACLEAN,
MR RUPERT
STEELE AND
MS JANE
SMITH
Q500 Mr Anderson:
Dr MacLean, in your evidence you suggested that the NPSs should
not contain proposals for CCS readiness. Why do you say that?
Dr MacLean: We believe that the
advice that is given in the NPS at the moment to the IPC sets
a hurdle that it is just not possible to get over at the moment.
That particular point is the reference to the need for the developer
to show the commercial viability of the retrofitting of CCS to
any combustion plant. We all know at the moment that we are struggling
to get four demonstration plants put forward in order to demonstrate
the technical and commercial viability of the technology. Therefore,
if you have a requirement to have shown that as part of the advice
to the IPC, at the moment that is not something that anybody can
demonstrate. The logic for us of having that in there is that
at the moment it will not be possible to gain consent for any
combustion plant project other than the four demonstration plants
where the Government has said it will provide the commercial viability
through the CCS levy. For all others, whether it is biomass or
gas, that hurdle cannot be met, and technically saying to the
IPC, as it does, "Without the developer having proven that
to you, you must turn down the application", means that there
is effectively a moratorium on the development of gas or other
combustion plant projects at the moment, which I am sure is not
the intention but is the logical conclusion that we have come
to in reading the NPS as it is currently drafted.
Q501 Mr Anderson:
So if there was final support from the Government for other forms,
for demonstration plants in effect for gas or biomass, you would
feel happier.
Dr MacLean: Effectively the Government
would have to underwrite any cost that is required for retrofitting
to a combustion plant project in the way that it has for the four
coal ones for us to demonstrate that that will be commercially
viable. With the volumes of gas in particular that need to be
built, that just seems like a commitment that even the Government
would not be able to give to that sort of bottomless pit of cost
that might be required to retrofit CCR to any plant.
Mr Steele: We have identified
this issue and commented on it in our response to the Government's
consultation on CCR. We think that it is possible on a kind of
scenarios basis to write a case that is capable of acceptance,
although we do agree with SSE that the wording is defective. We
have put forward a planning case around Damhead Creek 2 which
addresses this issue and so far has not been rejected by DECC
under section 36. I am not sure I would put the matter quite as
starkly as Keith does, but it is the case that the requirement
to say that the retrofit is commercially viable is an over-implementation
of the directive and, in our view, should be struck out. That
does not mean to say we believe that the CCR requirement generally
is inappropriate; I think it is just a mistake in the way
Q502 Paddy Tipping:
Can we put this in more simple terms for meI am struggling
with this! Carbon capture readiness has two tests, does it not?
Is it technologically going to be able to deliver? Are we going
to do some work on that?
Dr MacLean: Yes.
Q503 Paddy Tipping:
We are going to sort that out. Is it commercially viable? That
is the bit that is difficult, is it not?
Dr MacLean: Absolutely.
Q504 Paddy Tipping:
Because we have not got a clue, to put it bluntly in my terms,
whether things are going to be commercially viable in the future.
Dr MacLean: Absolutely. To clarify,
we are not opposed to the carbon capture readiness clause or a
requirement in terms of having the physical space and those aspects;
but it is particularly, as Mr Tipping is saying, setting that
hurdle of being able to demonstrate commercial viability. We just
cannot do it.
Ms Smith: What we are saying is
that it needs a phased approach. Until you can prove that it can
work at a commercial scale, then the industry is just not in a
position to comply. We support it; we want it to work, and we
are going to be actively involved in making it work, but let us
have a commitment in the NPS that says that, and as soon as it
is commercially viable, then it comes in.
Q505 Mr Anderson:
The question is about getting the words right rather than the
intent.
Ms Smith: Yes.
Q506 Mr Anderson:
Clearly, you are very much aware that some of the opposition,
to do with anything on coal or gas, the real intention is to build
some power stations and then say, "Oh, because we are desperate
for supply we will let them go unabated." We are clearly
not going down that line by suggesting taking this out.
Dr MacLean: Absolutely not.
Mr Sambhi: It is in the overarching
statement at 4.71, the last bullet point, where we are saying
the criteria is that it has to be economically feasible. It is
either elimination of that or significant re-wording that is required.
Q507 Mr Anderson:
Can I ask you about the specific other issue, which is not in
here, and that is about guidance on the transmission and storage
for gas in particular. Do you think that should be in?
Ms Smith: Yes, absolutely. CO2
pipelines and storage are absolutely essential, as I mentioned
earlier. As far as we understand, we believe it is just a simple
omission, and that DECC will certainly look to include them, because
obviously we need to take the carbon dioxide away and store it
in a secure underground storage space.
Q508 Sir Robert Smith:
What needs to be done and how long do you think it is before we
will be able to say that there is commercially viable carbon capture,
because without that coming across the horizon then we are going
to be locking ourselves into a high carbon generating system.
Dr MacLean: If you look back at
the records of the Energy Bill Committee discussion we had on
this one, none of us were drawn on a date on that because it is
not clear yet.
Mr Steele: We have a proposal
around Longannet power station, which will have a demonstration
up and running by 2014, and that will give people a great deal
of information about the costs and performance of CCS if it goes
ahead. We think that is the fastest and surest way of getting
the information. Whether ultimately we will need to fit a lot
of CCS on gas, I think is a moot point. It depends how intensively
the plants are used. If you envisage a world where you have got
a lot of nuclear and a lot of renewables and gas is filling in
the gaps, then your overall CO2 across your electricity portfolio
could be quite low, even if the gas was not abated, and the cost
per tonne of CO2 of abating a gas-fired power station that is
only used 25 per cent of the time might be truly scary. I think
that is a debate that we will need to have as we evolve our knowledge
of what is happening in the future.
Q509 Mr Weir:
When this issue was debated in the Energy Bill Committee the Government's
response to gas was that research had been done elsewhere rather
than in the UK and gave Norway as an example of that. Are you
following research on gas abatement from other areas as something
that may be necessary to secure, or is it the case that you would
only put in CCS in your stations if there was a subsidy for it?
Dr MacLean: As a general principle
we are obviously following international developments. I do not
have anything specific on that but we would want to look at that.
Centrica and ourselves had quite advanced plans for some initial
demonstration work on gas, and we want to see that progressing.
If it is not possible under the CCS levy in the UK, then we will
have no alternative but to look at international developments.
Mr Sambhi: From our perspective,
we exited our clean coal project, and whilst we are still looking
at the long-term feasibility of it our view is that we have to
see the demonstration plants work before we have a clear view
of whether we would re-enter.
Q510 Paddy Tipping:
I just want Jane to coordinate things and drop me a note after
the meeting about when these NPSs should be reviewed. What would
be the trigger point for the review? Secondly, how far can the
Secretary of State come in and change the NPS by directive? It
is an area we have not had a chance to cover today. Jane, would
you talk to your colleagues about that? If you need more information,
Rob will supply you with the questions but not the answers!
Ms Smith: I think, Mr Tipping,
we can provide you with some helpful answers.
Paddy Tipping: I am grateful to you all
for coming. It has been quite an interesting discussion, particularly
around CCS, where clearly we have got a lot more work to be done.
Thank you all very much indeed.
|