SCCS welcomes the publication of the CCS Cost Reduction Taskforce’s (CRTF) final report, “The potential for reducing the costs of CCS in the UK”.
SCCS participated in the taskforce, and fully supports the seven key steps which the report highlights as necessary for the development of a sustainable carbon capture and storage (CCS) industry in the UK.
The taskforce has concluded that gas and coal power stations equipped with CCS have the potential to be cost competitive with other forms of low-carbon power generation in the UK. However, the report crucially underlines that a number of key enabling actions must still be taken by both government and industry to make this a reality. Significantly, these are also required to enable the widespread application of CCS to industrial sectors, such as steel, cement or chemicals production, which will remain dependent on fossil fuels.
SCCS warns that the UK Government must rapidly engage with the scale of the problem. There is a looming UK electricity shortage coupled with a legal commitment to significant carbon reductions. At the same time, the UK is switching from secure domestic gas production and diverse coal imports to marketplace bidding for international gas imports. Carbon reduction must be led by fundamental changes to electricity generation, yet some sectors of government are suggesting that CCS may not be necessary.
If the UK is to meet its carbon reduction targets by 2030 then, working backwards to the present day, it is clear that new power plants fitted with CCS have to be built at unprecedented rates throughout the 2020s. At present, CCS is seen as “too expensive” by many electricity generators. Hence the taskforce’s recommended steps to reduce costs are essential in order to bring the price down to less than £100 per MW hour – in other words, midway between onshore wind and offshore wind.
SCCS is therefore strongly supportive of the taskforce’s finding that a longer term vision for CCS in the UK must exist beyond the two demonstration projects currently continuing in the UK’s CCS Commercialisation Programme. The UK will only be able to secure cost reductions and market development if there is much greater clarity as to how additional projects will be supported for both electricity generation and industrial sectors. The UK has put in place a unique pricing mechanism, which rewards low-carbon electricity with a higher price. This same mechanism must now be used to fast-track many more CCS projects.
Professor Stuart Haszeldine, SCCS director, said, “The CRTF’s final report clearly shows that CCS can be a low-cost and flexible route to a decarbonised energy sector, complementing renewable energies. A test of UK ambition and policy is to provide a Contracts for Difference price for the three waiting and ready projects, which are not currently in line to receive government funding. This could result in the UK leading the way on CCS worldwide.”
“Without such a guarantee by the end of June, there is a danger that we will instead lose these projects. China said this week that it anticipates getting CCS up and running within five years. Are we just as serious about CCS in the UK?”