Donnerstag, 1. November 2012

Short list for UK’s £1bn CCS competition announced

Four bidders have been short listed for the next phase of the UK’s £1bn Carbon Capture and Storage (CCS) competition.

The UK is providing funding to support the development of CCS technology, which if developed at scale, could allow the safe removal and storage of harmful carbon emissions from coal and gas plant. The four were selected from eight bids received after a thorough evaluation process that considered project deliverability, value for money, and the Government’s timetable to deliver a cost-competitive CCS industry in the 2020s.

The successful projects are now being invited to take part in a period of intensive commercial negotiations with Government before decisions on which projects to support further are taken in the new year. Three of the UK’s short listed bids also applied for European Commission funding from New Entrant Reserve (NER) allowances.

The UK Government has written to the Commission to inform them that it is willing to support these projects in the Commission’s Competition, subject to their ultimate success in the UK Competition. The Commission will make a final decision on whether to support a UK CCS project at the end of the year.

Following further decisions in the new year the UK Government expects that projects will undertake engineering studies before final decisions to build. 

Background Information

The UK Department of Energy & Climate Change (DECC) published the first UK CCS Roadmap on 3 April 2012. This set out the action the UK Government is taking to enable the development of a new CCS industry in the 2020s, including:
  • the Competition, the ‘CCS Commercialisation Programme’, which aims to drive down costs by supporting practical experience in the design, construction and operation of commercial scale CCS with £1bn capital funding, and additional support, subject to affordability, through low carbon Contracts for Difference;
  • £125m funding for Research and Development, including a £20m innovation competition to support the development and demonstration of CCS at component and pilot scale. Decisions on projects to support under this competition are expected to be announced in the coming weeks;
  • planned long term Contracts for Difference through Electricity Market Reforms to drive investment in commercial scale CCS in the 2020s and beyond;
  • commitments to working with industry to address other important areas including developing skills and the supply chain, storage and assisting the development of CCS infrastructure (and we will be publishing a storage strategy shortly); and
  • a focus on international engagement, in particular on learning from other projects around the world to help accelerate cost reduction in the UK, and sharing the knowledge we have generated through our programme.

The NER300 is a European Commission competition for CCS and innovative renewable projects. The Commission is due to announce awards from its first round of funding at the end of this year. In order to do that Member States need to state which projects they are prepared to support from the list that the Commission has published. The Commission have informed us that no more than 2 or 3 CCS projects (across Europe) will receive funding in this round. The maximum support available for CCS projects is around £250m per project. Each Member State is allowed to support 3 projects in total (i.e. CCS and renewables projects combined), although projects on the Commission’s reserve list are allowed to be supported without limitation at this stage.

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