Energy and Climate Change Secretary Edward Davey launched a new £1bn competition to develop Carbon Capture and Storage (CCS) today.
The competition, named the CCS Commercialisation Programme, aims to drive down costs by supporting practical experience in the design, construction and operation of commercial scale CCS with £1bn capital funding. There will also be additional support, subject to affordability, through low carbon Contracts for Difference.
Edward Davey said: “We have £1bn available to support the upfront costs of early projects along with a commitment to further funding through low carbon Contracts for Difference, we have £125m to support research and development including a new UK CCS Research Centre, and we have the long term incentives in place through our Electricity Market Reforms.”
The announcement coincided with The Department of Energy and Climate Change publishing the first UK CCS roadmap, setting out the steps government hopes to take in order to develop a world-leading CCS industry by the 2020s. This includes:
- Funding for Research and Development totaling £125m, including a new £13m UK CCS Research Centre.
- Planned long term Contracts for Difference through Electricity Market Reforms to drive investment in commercial scale CCS in the 2020s.
- Commitments to working with industry to address other important areas including developing skills and the supply chain, storage and assisting the development of CCS infrastructure; and
- A focus on international engagement, in particular on learning from other projects around the world to help accelerate cost reduction in the UK.
The government estimates that green growth on the journey to a low carbon economy could support around 100,000 jobs in the sector and be worth £6.5bn a year to the UK economy by the end of the next decade.
“The potential rewards from Carbon Capture and Storage are immense. It is a technology that can de-carbonise coal and gas-fired power stations and large industrial emitters, allowing them to play a crucial part in the UK’s low carbon future,” said Mr Davey.
Mr Davey wants to develop partnerships with industry, rather than in isolation, to ensure the security and diversity of the UK’s electricity supply. “It is an industry that can make our energy intensive industries cleaner and an industry that can bring jobs and wealth to our shores,” he said.
Jeff Chapman, CEO of the Carbon Capture and Storage Association said: “This announcement creates an opportunity for the UK to take a leading role in world markets while cost-effectively reducing emissions, creating employment and generating prosperity.