New study comes as UN climate chief calls for fossil fuel subsidies to be directed towards CCS projects
Lack for funding for carbon capture and storage will mean the UK misses the opportunity to reap £35 billion of economic reward, help to cut greenhouse gas emissions, and generate electricity more cheaply than nuclear and wind, a report said on Monday.
The report, which was written for lobby group the Carbon Capture and Storage Association, and a group of trade unions, said the government should increase state funding for the technology.
Globally, carbon capture projects have so far failed to attract the billions of pounds of investment needed to trap the greenhouse gas and bury it on a large scale.
“The government should strongly endorse a long-term vision for the sector,” the report said, adding that final decisions would be needed on projects soon after the next general election in 2015.
“New CCS plants would create thousands of new jobs and safeguard many more in energy intensive industries such as steel, chemicals and cement. This is a great opportunity to re-invigorate our manufacturing sector and bring new R&D, design and construction jobs to areas like Yorkshire, the North East and Scotland,” the head of the UK’s Trades Union Congress said in a statement.
The joint report also urged policymakers to expand a competition that provides an award of 1 billion pounds to carbon capture projects.
Stronger government backing for the technology would help protect the remaining 10,000 jobs in the UK’s coal industry, the report added, which are at risk because most of the country’s old coal-fired power plants will shut over the next decade.
The report’s estimate that 35 billion pounds of economic benefit from carbon capture were based on 20GW of coal-fired electricity deploying the technology.
But so far only two projects have been presented as detailed proposals in the UK.
Drax, the owners of western Europe’s largest coal-fired power plant, and a partnership between Scottish and Southern Energy and Shell have been shortlisted to access public funding but they are unlikely to make a final investment decision until they know whether they will get UK and EU funding.
Before stumping up the hundreds of billions of pounds needed to replace ageing energy infrastructure over the next few decades, UK energy companies also want to how much they will be able to charge for electricity generated from particular technologies such as carbon capture.
The UK has been touted as a potential leader in carbon capture technology in Europe because of its experience in the offshore oil and gas industry and availability of potential storage sites off its long coastline.
But only one project, in the Netherlands, is likely to be operating in the next few years, the EU’s energy commissioner Gunther Oettinger told a conference on Sunday.
“There is one project being realistic – the Rotterdam project – not in Poland, Spain, Italy, Germany or UK,” he said, adding that low carbon prices had undermined the business case for carbon capture.
UN climate chief Christiana Figueres told the same conference that governments should scrap the subsidies they give to the fossil fuel industry and redivert them to funding for carbon capture.
“Most (coal) reserves will have to stay in the ground…and they will have to be abated by carbon capture and storage”.
The International Energy Agency says hundreds of carbon capture projects will need to be operating by the end of the next decade and thousands by mid-century if the world is escape the worst impacts of climate change and continue to burn coal.
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