Chancellor Cancels £1bn CCS Budget
By Paul Homewood
Not immediately apparent from the Chancellor’s Autumn Statement today is the fact that he has withdrawn the £1bn budget for the CCS competition.
This is from edie.net:
The announcement was made by posting a regulatory announcement to the London stock exchange.
The statement read: “Today, following the Chancellor’s Autumn Statement, HM Government confirms that the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available.
“This decision means that the CCS Competition cannot proceed on its current basis. We will engage closely with the bidders on the implications of this decision for them.”
The £1bn fund was intended to be allocated via a competition to support the development and deployment of CCS projects in the UK.
The muted announcement comes just hours after the Chancellor George Osborne announced during the Autumn Statement that DECC’s budget will be reduced by 22% over the next four years, delivered through efficiencies in corporate services and reducing the cost of contracts.
This doesn’t take into account DECC’s innovation programme, which will double to £500m over the next five years, ideally to strengthen the future security of supply, reduce the costs of decarbonisation and boost industrial and research capabilities.
The article goes on:
Commenting on the CCS cancellation Claire Jakobsson, head of climate & environment policy at EEF said: “The cuts to the UK’s CCS funding are extremely disappointing, whilst we understand that government has had to make some extremely tough decisions, this one is not in the long term interests of the UK economy or energy consumers
CCS has the potential to halve the costs of decarbonising the UK economy by 2050, which amounts to £32 billion a year by 2050. In choosing to save a relatively small sum of tax payer money in 2015, government is unnecessarily committing vast amount of future energy consumers’ money.
£32 billion? Politicians from all parties, not to mention the obnoxious Gummer and his cronies at the Committee on Climate Change, have been doing their best to hide numbers like this.
The CCS competition was launched by Ed Davey in 2012, when he announced “we have £1bn available to support the upfront costs of early projects along with a commitment to further funding through low carbon Contracts for Difference”.
Today, following the Chancellor’s Autumn Statement, HM Government confirmed that the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available.
Commenting on the news that the budget for the CCS competition is no longer available, Leigh Hackett, CEO of Capture Power, said: “We are surprised and very disappointed by the Government’s decision to cancel the £1bn CCS Commercialisation Programme more than three years into the competition.
“It is too early to make any definitive decisions about the future of the White Rose CCS Project, however, it is difficult to imagine its continuation in the absence of crucial Government support.”
The other project, at Shell’s Peterhead site, don’t appear to have formally responded yet.
The decision by the Chancellor seems to be a recognition that, with the current state of technology, CCS is a dead duck.
Significantly, DECC’s press release on the Autumn Statement reveals extra spending on more promising technologies:
The government’s doubling of investment in DECC’s innovation programme will help position the UK as an international leader in small modular nuclear reactors, and deliver commitments on seed funding for promising new renewable energy technologies and smart grids.