CCS deployment delays could cost billions
The letter, addressed to Energy and Climate Change (ECC) Committee chair Angus Macneil, argues that the costs will increase to an estimated £4-5bn annually in 2040, even if CCS is implemented in the 2030s, while additional expenditure will be approximately £2-3bn as the technology “matures” by 2050.
Dr David Clarke, chief executive of the ETI and author of the letter, argues that the firms’ analysis has consistently shown that CCS is a key component in minimising the costs imposed on consumers and businesses by a transition to low carbon energy.
“In view of the strong evidence that points to the likelihood of increased costs and risks arising from delaying CCS in UK, there is a critical need to develop a new, alternative strategy to support CCS deployment during the 2020s and avoid a situation where the availability of CCS is effectively denied to the UK permanently,” he said in the letter.
“The previous strategy of public sector capital support has now failed twice; hence a different approach is key.”
The claims add to criticism voiced by industry experts as part of an inquiry by ECC Committee into the government’s decision to cut its £1bn support for CCS in November, with a number of energy professionals claiming the government is jeopardising its entire climate policy, along with thwarting the EU’s strategy to develop CCS in Europe, during a committee hearing in London last week.
Committee chair Angus MacNeil spoke out against the DECC’s recent cost-cutting measures, claiming the department are being "pennywise and pound-foolish."
“Reason does not work with this Government. They have a mantra, an obsession with balancing the books. They are like a farmer who thinks that seeds in the springtime are an unnecessary extravagance.
“They need to introduce an element of time into their cost considerations. The problem is that they are looking after people’s bills today and not thinking about people’s bills tomorrow. If we don’t invest today we will see higher prices tomorrow.”
The ECC Committee stated last October that the cost of CCS could fall from £170/MWh to £100/MWh by the mid-2020s if government support continued, however David Cameron told MPs earlier this month that CCS remained too expensive and that ending support was the “right decision.”
Sam Gomersall of Pale Blue Dot Energy, who has been working on CCS and emerging energy systems for almost the last nine years, CCS is essential to avoid locking in carbon emissions from new gas power plants, stressing the particular importance the technology has on industrial emissions as it is one of the only ways to decarbonise industries such as steel and cement.
“The key is to develop UK policy that supports industry to implement emissions reduction in the UK. This requires funding for industrial CCS in the UK,” he said in a letter to the Financial Times.
“To date, UK and international progress on CCS has been slow. This is because long-term political vision and commitment are required for CCS and the nature of the electoral cycle inhibits politicians from thinking long term.
“If we are to meet the COP21 target of significantly less than 2C global average temperature rise, then CCS needs to be part of the mix.”
