Clean Growth Strategy puts £100m carbon capture plan back on Clark’s ‘to do’ list

The new Clean Growth Strategy published by Business Secretary Greg Clark and Climate Change Minister Claire Perry has been welcomed by the Energy Institute for delivering on the ‘asks’ of professionals working in energy.

Louise Kingham, Chief Executive of the Energy Institute said: “Taking energy efficiency seriously in homes, businesses and industry will cut emissions, bring down bills and increase productivity more effectively than anything else. 

“And putting CCS back at the table and action to tackle emissions from heat, alongside renewables, nuclear and electric vehicles make this a credible plan.”

Luke Warren, Chief Executive of the Carbon Capture and Storage Association, commented: “We welcome the release of the Clean Growth Strategy and the recognition of both the critical role of CCS to reducing CO2 emissions and the clean growth opportunity this offers to the UK industrial strategy.

“However, delivering a strategy requires action and there is a lack of detail on how these ambitions will be delivered. Government and industry must now work together to define the steps required to deliver CCS and make meaningful progress on these this parliament if the UK is be a leader in this field.  

“We have recently seen impressive drops in the cost of other low-carbon technologies. This shows the power of Government and industry collaboration to drive large-scale deployment and cost-reduction. We now need Government to get behind carbon capture in the same way.”

Oliver Rix, Partner in Energy at the Baringa consultancy, said that getting an actual carbon-capture project developed is vital to proving the technology.

He said: “Little progress has been made in the development of carbon capture usage and storage (CCUS) since the unexpected cancellation of the second competition. It is a key decarbonisation technology, with potential applications in the power sector and across industry and potentially heating when used in hydrogen production and to create negative emissions in combination with biomass.

“The UK has significant potential for CCUS development, building on its mature offshore industry and its substantial geological storage resource. It is critical therefore that the Government plays a central role in driving this forward, and today’s Clean Growth Strategy is a step in the right direction.

“The commitment of up to £100 million in leading edge CCUS and industrial innovation has the potential to drive down costs, but this is a fairly insubstantial sum, and without clarity on how this will form part of the Government’s future energy system, the announcement could be seen as somewhat tokenistic.”

“Key lessons from the previous attempts to implement CCUS need to be learnt and solutions identified to existing challenges, particularly in relation to risk sharing and the role of different parties across the CCUS chain – from capture, through transport to storage. Getting a commercial scale project off the ground is the only way to generate real learning and this seems unlikely to happen in the context of today’s announcement.”

The CBI also said that putting carbon capture and storage back on the agenda is ‘a positive step.’

Ken Cronin, Chief Executive of UK Onshore Oil and Gas, said: “We welcome today’s Clean Growth Strategy, which re-affirms the importance of natural gas for heating and makes clear the international consensus on the need for carbon capture, usage and storage.

“By replacing high lifecycle emission LNG imports with natural gas produced onshore, we can help to reduce the UK’s carbon footprint and provide a cost-effective source of energy and feedstock for our homes, businesses and industry.

“Natural gas will continue to be a critical fuel for the UK in the transition to a low carbon economy. As the report makes clear, the reforming of methane with Carbon Capture and Storage is likely to be the primary means of producing low carbon hydrogen, which has great potential to decarbonise heating, transport and industry and improve air quality.”

According to the Energy Institute’s recent Energy Barometer 2017 which surveyed professionals working across the energy sector, its members considered energy efficiency the top priority measure to lower emissions at least cost, with 64% of respondents rating it as key to seizing the economic advantages of the shift to low carbon.

EI members perceived carbon capture and storage (CCS) as the riskiest area of the energy system for investors because of policy uncertainty, with 73% of respondents rating the risk as either ‘high’ or ‘very high’.

The Clean Growth Strategy commits the Brit-Govt to ‘demonstrate international leadership in carbon capture usage and storage (CCUS), by collaborating with global partners and investing up to £100 million in leading edge CCUS and industrial innovation to drive down costs’.

Two years ago, the then British finance minister George Osborne shocked the industry by pulling the plug on £1 billion of public funding for a joint SSE-Shell carbon capture project at Peterhead power station.

Kingham added: “The strategy is really important for the UK’s standing on the global climate change stage, as we look to the next round of UN talks hosted by Fiji in Bonn next month.

“But meeting the UK’s carbon targets is ultimately a numbers game and the real proof will be in the delivery.

“Hitting 57% emission reduction by 2030 in a cost-effective way, and realising the big industrial wins that come with that, calls for a no-surprises investment climate.

“This includes policies aimed at getting the best deal for billpayers, which must take a balanced, long-term view of consumer interest.”

13 Oct 2017

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