Government pulls out of CCS project
Plans to build a demonstration project for carbon capture and storage (CCS) in Scotland have been abandoned after the UK government withdrew funding.
The ScottishPower Consortium, which has been working on plans for the Longanett plant for four years, has confirmed that construction would not be going ahead after DECC announced that it would not be supporting the project.
Energy secretary Chris Huhne said that DECC’s negotiations with the developers had failed to reach a “satisfactory” conclusion, with the department deciding to invest the £1 billion of government funding earmarked for CCS development in alternative projects.
“A billion pounds is enough to demonstrate this vital new technology in the UK, but it’s got to be spent in the most effective way,” he said. “Despite everyone working extremely hard, we’ve not been able to reach a satisfactory deal for a project at Longannet at this time.”
Huhne’s comments came after David Cameron told the House of Commons the Longannet scheme wasn’t working as intended, when he was asked to intervene and help the negotiations by Scottish MP and shadow energy minister Tom Greatrex.
“It is a huge concern that the prime minister claims Longannet isn't working and utterly perplexing that he could not come to agreement with the energy company to make this work,” said Greatrex.
“[The] move highlights the dead hand of the Treasury in scuppering moves towards a greener energy mix. It risks losing our competitive advantage in developing carbon capture – engineering expertise and valuable skills that we could export around the globe.”
The Longannet project was only entrant left in a competition for the government’s £1 billion of funding for CCS, after E.ON abandoned its plans for a plant in Kent, but rumours have been circulating in recent weeks that the government was unwilling to invest in an unproven technology.
In a statement on the decision to not fund Longannet, DECC described the need to balance the UK’s low-carbon ambition against ensuring the most effective use of taxpayer’s money and revealed that the funds will now be channelled into other CCS projects.
ScottishPower’s generation director, Hugh Finlay, said that the research undertaken for the scrapped project would be crucial in the development of CCS in the future.
“As a result of the study we now understand how the CCS process works from power station to storage site,” he said. “This gives us great insight into the physical infrastructure that we need to support it, the regulatory framework it fits within and the organisational model of a CCS business.
“All of this information will be made available through DECC’s knowledge transfer programme and will be of enormous benefit to other CCS developers and stakeholders.”
The scrapping of the scheme was described as a lost opportunity by Scottish first minister Alex Salmond, who had previously called on David Cameron to get behind the project.
“It is just as bad a decision as when the previous UK government abandoned the Peterhead pre-combustion gas carbon capture project four years ago – which the current coalition parties rightly criticised,” he said.
“At the end of the day, this technology requires the courage and the vision to make the investment happen, and that is what has been lacking in successive Westminster administrations."
Salmond went on to say that the Scottish government had been led to believe that a gas carbon capture project in Peterhead is now a contender for support, but voiced concerns that history would repeat itself again.
“As we now know to our cost twice over, warm words are not enough,” he said.
Salmond’s comments were echoed by the CBI’s director for business environment Rhian Kelly.
“This is disappointing news, but we hope an alternative CSS scheme at Peterhead goes ahead as soon as possible,” she said.
“It is crucial that the government does all it can to provide the policy certainty that companies need to invest in energy infrastructure, and we must see a plan for action on CCS before the year is out.”