GHG Reduction Technologies Monitor
Article 25009 of 29410
January 12, 2016

U.K. PM Defends Choice to Scrap £1 Billion CCS Competition

By Abby Harvey

Abby L. Harvey
GHG Daily
1/13/2016

British Prime Minister David Cameron yesterday stood by his government’s decision to nix a £1 billion carbon capture and storage commercialization competition. When the completion came across the table during a spending review, Cameron said, the government Cabinet collectively decided it was time to pull support. “It seemed to me that carbon capture and storage, while I completely believe in the idea … the economics at the moment, you know, really aren’t working,” Cameron said at a meeting of the parliamentary Liaison Committee.

The U.K. announced on Nov. 25 the official cancellation of the funding competition. “Today, following the Chancellor’s Autumn Statement, [Her Majesty’s] Government confirms that the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available,” the government said in a statement to the London Stock Exchange. “This decision means that the CCS Competition cannot proceed on its current basis. We will engage closely with the bidders on the implications of this decision for them.”

Cameron, being questioned by the Scottish National Party MP, Angus MacNeil, said the money set aside for the commercialization project would be better used elsewhere. “It seemed to me, and governing is about making decisions, that the right decision was to say we won’t go ahead with the billion, because that’s a billion we can spend on other capital investment projects, including energy projects like making progress on energy storage.”

The competition was launched in 2012, and a funding decision was expected in coming months. Two projects remained in the running for the award: Royal Dutch Shell’s Peterhead project in Aberdeenshire, Scotland; and the White Rose CCS Project in Yorkshire, managed by the Capture Power consortium, which would be a new-build coal-fired power plant with CCS. A week before the CCS competition termination announcement, the U.K. government announced plans to close all unabated coal-fired power plants by 2025, signaling a move to lower-carbon forms of energy.

Following the cancelation the competition, Shell announced that it would not proceed with the Peterhead project. Capture Power also responded to the cancelation, saying that while a definitive decision had not been made, “it is difficult to imagine its continuation in the absence of crucial Government support.”

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