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Launch of Hydrogen, Fuel Cell, and Carbon Abatement Technologies Demonstration Programme

Malcolm Wicks MP,  Minister of State for Energy
DTI Conference Centre,  19 September 2006

Good afternoon ladies and gentlemen.  I am delighted to welcome you to today's launch of the £50m Hydrogen, Fuel Cell, and Carbon Abatement Technologies demonstration scheme.  Today is an opportunity to hear how we envisage the scheme running and to help you prepare for the 1st call for proposals on 23rd October.

Setting The Scene

Reducing carbon emissions was one of the central objectives of the energy review and formed a major part of the conclusions we published in July.

The conclusions seek to reduce carbon emissions through a wide range of measures - from encouraging renewables to improving energy efficiency.  But they also recognised that carbon capture and the demonstration of other new low carbon technologies was essential for long term reduction of our emissions.

The review concluded that sustainable energy technologies such as Carbon Abatement, Hydrogen, and Fuel Cells all have the potential to make a significant contribution in meeting the Government's policy objectives in reducing CO2 and enhancing the UK's security of energy supply.

What we are offering today

Some of you will have been present at the publication of the CAT and Hydrogen Strategies at the Royal Institution where I announced that a demonstration fund would be available for these technologies.  At that time, we thought that a total of £40 million of DTI funding would be available, but since then a further £10 million for carbon abatement technologies was announced by the Chancellor in the November 05 pre-budget report.  This means that the total amount of DTI funding available over the lifetime of the programme will be £35 million for carbon abatement technologies and £15 million for hydrogen and fuel cells.

Following these announcements, we have worked closely with industry and our advisory bodies to determine how this fund could really benefit the UK by supporting the demonstration of these important and exciting technologies.  We have also engaged with the European Commission in order to secure the necessary EC State Aids approval.

I am announcing today that for the first call for proposals on 23rd October: £10 million will be available for Carbon Abatement Technologies and £5 million will be available for hydrogen and fuel cells.  We see CAT, Hydrogen, and Fuel Cell Technologies as "linked but distinct" and envisage the programme being able to exploit the synergies and commonalities between these technologies.

As we said in the Energy Review, this first call of the demonstration programme for Carbon Abatement Technologies will focus on "the pre-commercial demonstration of key components and systems to support carbon abatement technologies".

Carbon Capture has the potential to reduce emissions from energy production by up to 85% and the UK is well endowed with potentially suitable storage sites for CO2.  It's important we use this fund to quickly capitalise on our advantages in this field.

There will be an opportunity to explore this further with the scheme management contractor (Black and Veatch) and my officials later on this afternoon.

Other Actions Supporting Commercial Deployment

We recognised in the Energy Review - and a number of other specific technology strategies - that funding for demonstration projects is an important aspect in helping the commercial deployment of these technologies.

We also recognise that there are a number of other key issues that we need to continue to work on.

Government remains committed to supporting basic research through the research councils including the SUPERGEN consortia and applied research through the DTI's Technology Programme.  Indeed, one aspect where we envisage demonstration projects being of value is the identification of further research and development requirements for these technologies.

The recently announced Energy Technologies Institute will also have a key role in developing appropriate research and development towards secure, reliable and affordable low carbon energy technologies.  It will bring together the public and private sector for a true collaboration which will set the direction for green energy advances for decades to come.

We continue to work with our international partners in these technology areas, in participating in a number of International Energy Agency Agreements such as the IEA Clean Coal Centre and the IEA Implementing Agreements on hydrogen and on fuel cells.  The UK is also an active member of the International Partnership for the Hydrogen Economy and the Carbon Sequestration Leadership forum.

We are actively involved in the European Technology Platforms for Hydrogen and Fuel Cells and the Zero Emission Fossil Fuel Power Plants.  And recognising that China will overtake the US in about 20 years to become the world's largest emitter of green house gases (GHG). We are following up on our European Commitments in delivering the EU-China Near Zero Emissions Coal Initiative.  We continue to work in partnership with Norway through the North Sea Basin taskforce and are conducting a study into the advantages of and barrier to the development of a potential CO2 network.

We are also actively engaged in the discussions leading to the launch of Framework Programme 7 where energy is expected to emerge as a key thematic issue. The Government will carry on to push for Carbon Capture and Storage and Surface Transport to be included within the European Emissions Trading Scheme.

We recognise that developing the right statutory and regulatory framework is a key issue for Carbon Capture and Storage (CCS) both internationally and here at home.  We will continue to work with international partners to amend the London and OSPAR Conventions to provide the legal basis for CCS and we have also established a CCS Regulatory Task Force to ensure that appropriate regulations are developed and environmental integrity of CCS activities are assured in the UK.

Moving slightly closer to the home, Micro-generation is also an area of increasing importance; I launched the Government's microgeneration strategy and the Low Carbon Building Programme earlier this year which is providing Government funds to encourage deployment of microgeneration technologies.  Fuel cells have a role to play here also - as a potential replacement for the domestic gas boiler, which also generates electricity.

We are also in the process of launching a number of consultations following the energy review conclusions. These range from reform of the planning regime, to improving information on consumers energy bills.

Conclusion

I hope this has given a flavour of some of the wider carbon reduction and technology activities that we are involved in and where we see the demonstration programme contributing to assisting the commercial development of carbon abatement, hydrogen, and fuel cell technologies.

As I said at the time of the launch of the Strategy documents, the journey that we began last year will be a long one and we will to need to review progress regularly.  We need to consider a range of measures to achieve the objectives of cost-competitive carbon reductions and long- term energy security.

Today is another important step in that journey and I look forward to working with you all in making further progress along the path.