- Lawmakers criticize surprise end to $1.4 billion competition
- CCS could provide revenue from disused North Sea gas fields
The U.K. will struggle to meet its climate change targets and could miss out on earnings from empty oil and gas fields because of a surprise government decision to scrap a 1 billion-pound ($1.4 billion) carbon-capture and storage contest, a panel of lawmakers said.
Ministers must urgently devise a new plan to bolster CCS or it risks losing all investment in the emerging technology, Parliament’s Energy and Climate Change Committee said Wednesday in a report. The equipment would trap fossil fuel emissions from factories and power plants and store them permanently underground.
“If the government is committed to the climate pledges made in Paris, it cannot afford to sit back and simply wait and see if CCS will be deployed when it is needed,” said Angus MacNeil, chairman of the committee, referring to the United Nations summit in December, where almost 200 countries agreed to limit global warming to “well-below” 2 degrees Celsius (3.6 degrees Fahrenheit).
Prime Minister David Cameron’s Conservative government scrapped the competition in November, even though the party’s 2015 election manifesto listed the funding among its measures to tackle climate change. It’s the second time the government has dropped funding for CCS. The Department of Energy and Climate Change said on Wednesday that it’s still open to the technology.
“We haven’t closed the door to CCS technology in the U.K.,” DECC said in a statement. “CCS should come down in cost and we are considering the role that it could play in the long-term decarbonization of the U.K. We are committed to meeting our climate change targets in a way that is affordable.”
The lawmakers said the sudden decision to close the competition dented confidence among investors in the industry, which includes a partnership between SSE Plc and Royal Dutch Shell Plc to build the first full-scale gas CCS project in Peterhead, Scotland, and another alliance between Alstom SA and BOC Group Ltd to build the White Rose CCS project in northern England.
“U.K. companies had been working toward this for years and were only weeks away from final proposals,” said MacNeil. “The first hint one company had about the decision was when they read a news report the night before. This is the latest in a series of snap decisions that have damaged confidence in the government’s energy policy.”
The decision is of particular concern because this government is seeking to boost power supply from new gas plants, according to the report.
“Getting the infrastructure in place takes time and the government needs to ensure that we can start fitting gas-fired power stations with carbon capture and storage technology in the 2020s,” MacNeil said.
CCS could also provide income for the government if it leases out disused oil and gas fields in the North Sea for carbon storage, according to the committee, which urged the government to assess the financial benefits of CCS.
Without a clear CCS strategy “very soon, investment, assets and expertise in the U.K. will all be lost,” the committee said in the report.