Carbon Capture & Storage is a mitigation technology essential in tackling global climate change, and ensuring a secure energy supply. Without CCS, limiting a rise in global temperature to 2°C will be that much more difficult and costly; up to 70% more according to the International Energy Agency (IEA).
The development and deployment of CCS is critical in allowing us to reduce carbon dioxide emissions from the power sector, given the need to maintain fossil fuels as part of a diverse and secure low-carbon energy mix.
Up to £1bn of capital funding has been made available for the first CCS demonstration project. This is the largest public funding contribution in the world to a single CCS project, ensuring that the UK will continue to lead the way on large-scale demonstration.
In November 2010, the Government announced that the selection process for the additional three demonstrations will be open to projects on gas-fired power stations as well as projects on coal-fired power stations. While there is a commitment to a further three demonstration projects, decisions await to be taken on the funding mechanism; whether they are funded through a specific CCS levy or through general taxation, following consultation on a carbon price support mechanism in Spring 2011.
Latest News
17 February 2011- NER300: CCS APPLICATIONS
Energy Minister Charles Hendry welcomes the strong response to the NER.
10 February 2011- NER300: CCS APPLICATIONS
The NER competition is now closed to new applicants. DECC has received 9 CCS applications and is reviewing them. We will publish more information shortly.
02 February 2011- NER300: UK Q&A #2
The OCCS has published a second Q&A on the New Entrants Reserve (NER).
Please continue to submit any questions on the NER to occs@decc.gsi.gov.uk
17 January 2011- NER300: UK Q&A
The OCCS has published Q&A on the New Entrants Reserve (NER).
Please continue to submit any questions on the NER to occs@decc.gsi.gov.uk
21 December 2010 – UK CCS Commercial-Scale Demonstration Programme Further Information Document
The OCCS has published a Further Information Document on the UK Carbon Capture and Storage Demonstration Programme. The document provides further information and guidance in order to assist potential applicants to the Programme, including an early indication of the likely requirements of projects ahead of the launch of the Programme expected in Spring 2011.
10 December 2010 - Launch of Consultation on Third Party Access Provisions of CCS Directive & Call for Evidence on Long Term Development of CCS Infrastructure
Closing date for Third Party Access Provisions is 4 February 2011 and for Long Term Development of CCS Infrastructure is 4 March 2011. More information and consultation documents are available on the CCS Infrastructure consultation page.
10 December - Updated guidance
09 December – DECC guidance on the NER300 funding mechanism for CCS demonstration projects
The OCCS has published its guidance on the EU NER competition. We are continuing to develop our process and to engage with the European Commission to seek further clarification on the detail of the competition and will be providing regular updates via FAQs on the OCCS website.
The Commission published a new FAQ yesterday. This can be found with the Call documents on its NER website.
If you have any questions on either the UK or the EU process, please send them to Liz Kitchen at occs@decc.gsi.gov.uk.
09 December 2010 - Optimization of CO2 Storage In CO2 Enhanced Oil Recovery Projects
DECC have published a report to examine current understanding around the issue of the “carbon footprint” of incremental oil produced by CO2 injection EOR.
The key finding is that the carbon footprint is usually significantly lower than that for conventional oil (typically between 25-50% less), due to the impact of the CO2 that remains stored in the reservoir after the EOR project ceases. In some circumstances more CO2 can be stored than the incremental oil contains. Thus CO2 EOR can have an environmental benefit compared to conventional oil production.
The report was undertaken by Advanced Resources International (ARI).
09 November 2010 - Call for proposals for NER300 funding published
The European Commission has published its call for proposals for NER300 funding for renewables and CCS projects. The relevant documents can be found on the EC website. We are currently reviewing the documents and will publish guidance shortly. In the meantime, if you have questions please send them to occs@decc.gsi.gov.uk or ner.renewables@decc.gsi.gov.uk.
Whilst we are aiming to be in a position to select UK CCS demonstration projects 2-4 within a timetable commensurate with the NER process, there is no guarantee that we will be able to do so. We therefore cannot provide assurances that CCS winners through the NER process will receive funding from the UK Government. This does not affect our commitment to providing support to 4 CCS demonstration projects. We are aiming to publish further details regarding projects 2-4 by the end of the year.
It is expected that any successful renewables projects would match the NER300 funding with private sector funds.
UPDATE: The OCCS publishes a NER300 Q&A document on 17 January 2011.
08 November 2010 - Government opens up carbon capture and storage demonstration to gas
The Government today announced that the carbon capture and storage (CCS) demonstration programme - the three projects that will follow the first demonstration - will be open to projects on gas-fired power plants as well as coal-fired power plants.
08 November 2010 - Market sounding exercise
Respondents to the market sounding exercise shared details of a number of projects under consideration and provided very informative feedback on the scope of the programme, the selection process, regulatory and risk issues, and options for public funding provision.
The feedback covered a wide range of issues, including:
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Financing risks and the economic climate in the power industry
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Regulatory uncertainty, including the possible introduction of an Emissions Performance Standard and the ongoing Energy Market Review
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Potential public funding arrangements
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The Committee on Climate Change’s recommendation that we extend the programme to include at least one demonstration on a gas fired plant
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Cross-border transport and storage of CO2
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Imposing size restrictions on the eligibility of demonstration proposals
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The alternatives of a competitive unfunded FEED process versus an ‘open-book’ approach in which developers would provide Government with total transparency on costs and negotiations with suppliers
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Storage liabilities, and the EU’s draft guidance document on how these might be managed; and
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Insurance against the risk of leakage for the carbon dioxide storage site
DECC is reviewing this feedback and will be using it to inform the design of the demonstration programme’s objectives and deliverables, and the selection process and criteria against which proposals will be assessed. We aim to set out further details by the end of the year.
The respondents DECC met with over the course of the exercise are listed below:
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2Co, ADAS, Air Liquide, Alstom, Alstom-Drax, Ayrshire Power / Peel Energy, B9 Coal, BP, C.GEN, CO2 Deepstore, Doosan Babcock, ESBI Investments, National Grid, One North East, Powerfuel Power, Progressive Energy Ltd, Rio Tinto Alcan, RWE Npower, Scottish Power CCS Consortium, SEGEC, SSE, Stanbridge Capital, Statoil
Any queries on the market sounding exercise should be directed to Liz Kitchen at occs@decc.gsi.gov.uk
Many respondents indicated that they were happy for DECC to share their written responses publically. These responses and full details of the exercise can be found on the Market sounding for CCS Demonstration Programme Projects 2-4 web page.
20 October 2010 - Spending Review outcome
On 20th October the Government published the outcome of the Spending Review. The Review confirmed that the Government will provide £1bn in capital expenditure for the first commercial-scale CCS demonstration project. This is the largest confirmed commitment to a single commercial-scale CCS project in the world.
As part of the Review, the Government also announced that we will take decisions on the funding mechanism for the additional 3 CCS projects, i.e. whether through a specific CCS levy or through general public expenditure, following completion of work in Spring 2011, on the reform of the Climate Change Levy to provide support to the carbon price.
DECC continues to progress the current process for the first demonstration project as quickly as possible. We will also be developing the scope of the demonstration programme and the selection process for the additional demonstration projects following a very informative market sounding process. We will set out proposals on how demonstration projects 2-4 will be taken forward by the end of the year.
