Abby L. Harvey
GHG Monitor
11/13/2015
The United Kingdom may move to add retrofit carbon capture and storage projects to its Contracts for Difference (CfD) subsidy program, according to a consultation released Nov. 4 by the Department of Energy and Climate Change (DECC). The CfD subsidy is a private law contract between a low-carbon electricity generator and the government-owned Low Carbon Contracts Company (LCCC). DECC is accepting comments on the proposal until Dec. 2.
“Carbon Capture and Storage (CCS) is a potentially important technology for the decarbonisation of electricity generation and industrial processes, and is expected to play a key role in the reformed electricity market,” the document says.
Under the current CfD program, only new-build CCS projects can apply for CfDs. The proposal would expand the program to allow retrofitted facilities to take advantage of the program, providing a potential lifeline to older coal plants. To that end, the document says, “the Government proposes to amend the Regulations in order to specify that retrofit CCS projects are eligible for a CfD. This would include instances where an existing generating station, or part of it, is to be connected to a complete CCS system. The proposed amendment would ensure that existing CCS policy is correctly and expressly reflected in the CfD legislation.”
CCS deployment in the U.K. has been fairly slow. Currently, two projects are competing for £1 billion in funding in the U.K.’s CCS Commercialization Competition. The first, Shell’s Peterhead, would add CCS to a gas-fired power plant near Aberdeenshire, Scotland, reducing the site’s CO2 emissions by roughly 90 percent. The second, White Rose, would retrofit CCS onto an aging coal plant in Yorkshire. The White Rose project recently experienced a significant setback when one of its developers, Drax, pulled out of the project. “The projects that are part of the CCS Competition could, subject to the developers taking a final investment decision to proceed to construction and operation, and the Government taking a final investment decision to provide financial support (which might be provided to one, both or neither project), be the first CCS projects supported through a CfD,” the consultation says.
