Memorandum submitted by Prospect
INTRODUCTION
1. Prospect is a trade union representing
122,000 scientific, technical, and managerial and specialist staff
in the Civil Service and related bodies and major companies. In
the energy sector, we represent scientists, engineers and other
professional specialist staff in the nuclear and radioactive waste
management industries, the wider electricity supply industry and,
increasingly, also in the gas industry. Our members include experts
developing carbon capture and storage technologies and those with
regional responsibility for promoting sustainable energy systems.
They are engaged in operational and technical management, research
and development and the establishment and monitoring of safety
standards, environmentally and in the workplace. We are fortunate
in being able to draw on this broad range of knowledge and expertise
to inform our views.
2. Prospect welcomes the Select Committee's
decision to investigate the effectiveness of Emissions Performance
Standards (EPS). We believe that the need for action to deliver
secure and sustainable energy policies is urgent, and that a step
change in policy is necessary to deliver the necessary emissions
reductions to curtail dangerous climate change. Control of carbon
is the key issue and, with growing evidence that "cap and
trade" schemes do not work to maximum effectiveness, we believe
that "cap and regulate" should also be an option.
3. It is against this background, and our
longstanding support for investment in a secure, balanced low
carbon energy supply for the UK, that Prospect convened an expert-led
seminar at The Royal Society in October 2008 to discuss "The
Future for Clean Coal". At that seminar Charles Hendry, then
Shadow Minister for Energy, stated that "To me this debate
is not about whether clean coal is possible or desirable. The
fact is that it's vital. Our job has got to be to push forward
and deliver it because we are 35-40% dependent on coal for the
generation of electricity. We will continue to be an economy reliant
on fossil fuels and hydrocarbons for many years". The report
of this seminar is enclosed with the hard copy of this evidence
and can be accessed at http://library.prospect.org.uk/id/2009/00025
How effective is an EPS likely to be in driving
forward the development of CCS technology?
4. As set out in Prospect's seminar report,
there are a number of factors that would help in driving forward
the development of CCS technology. We do believe that there is
a role for the market. However, as Charles Hendry stated "If
the government leaves it purely to the market there is a real
risk that homes and businesses will be left without fuel or energy
in a few years to come". He argued persuasively for an EPS
to set a clear direction for investors of what the industry is
working towards and what is required of it. Prospect has certainly
supported the need for a clear, long-term and stable policy direction
to support investment decisions. In addition, government should
be prepared to commit public financial support, at least at demonstration
stage to prove that the technology works to scale. Among other
issues that need to be addressed, practitioners at our seminar
identified a clearer regulatory policy framework for key issues
such as long-term liabilities and greater clarity around health,
safety and environmental issues in order to reduce design and
other costs.
Could the introduction of an EPS pose any risks
to the UK's long-term agendas on energy security and climate change?
5. Against this background of broad support,
we do want to sound a note of caution about the potential practical
implications of introducing an EPS. For example, the technology
within gas turbine plant is such that installed plant would require
significant and costly adjustment to achieve the EPS aim of reducing
or restricting emissions. This would affect energy security as
all plants were modified within similar timescales. A move to
achieve EPS through installation of CCS technology would not be
viable at all sites, for reasons such as not having enough land
available, and these would have to be closed. For plants that
do have CCS fitted or retro-fitted there will be a learning curve
as CCS has yet to be proven on large-scale systems. In the event
that issues of reliability or high maintenance costs emerge, there
could be an impact on security of supply.
6. In terms of the impact on climate change,
carbon capture would beneficially reduce emissions from the plant.
However as with other EPS routes, such as fuel pre-processing
or plant redesign, there will be a negative impact on plant efficiency.
It will therefore be important to assess sustainability and impact
on emissions over the whole life cycle.
What is the likely impact of EPS on domestic energy
prices?
7. There is a general expectation that much
needed investment in the UK's energy infrastructure will increase
costs, though there is a separate debate to be had about how to
apportion the impact of price increases—not least to guard
against a regressive outcome for the fuel poor. To the extent
that EPS increases the capital cost of plant, increases maintenance
or operational demands, or results in more fuel being burnt, it
will contribute to increased costs. It could also lead to a further
decoupling of energy prices from the raw fuel cost, since the
cost of the fuel—whether coal or gas—will be a smaller
percentage of the overall power station operating costs.
September 2010
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