The Department of Energy & Climate Change has axed a £1bn fund to commercialise carbon capture & storage (CCS) in the UK.
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But Shell said it “no longer sees a future” in the scheme after the government announced it was withdrawing funding on Wednesday.
The DECC said it will “engage closely” with the bidders on the scheme to clarify the implications for them of the decision.
A spokesperson for SSE said: “Whilst SSE appreciates that being in government involves taking hard decisions, it is extremely disappointed by today’s announcement that the government is removing all committed public support for the demonstration of Carbon Capture and Storage in the UK”.
“It is too early to make any definitive decisions about the future of the White Rose CCS Project, however, it is hard to imagine its continuation in the absence of crucial Government support”. A second, White Rose, is being worked on at the UK’s biggest coal-fired power station by the plant operator Drax and engineering consortium Capture Power, which includes GE and BOC, part of the Linde Group. Without CCS, the costs of halting global warming would double, the IPCC said.
This means the money will return to European Union coffers, adding to the programme’s dismal record for funding carbon-cutting schemes and leaving the European Union with no advanced large-scale CCS schemes on the horizon.
United Kingdom manufacturers group EEF agreed and said the move was not in the long-term interests of the United Kingdom economy or energy consumers. Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business.
The United Kingdom government’s own advisors, the Committee on Climate Change, said in October: “CCS is very important for reducing emissions across the economy and could nearly halve the cost of meeting the 2050 target in the [UK’s] Climate Change Act”. “It is a significant blow to investor confidence and puts the U.K.’s chances for cost-effective decarbonization at risk”.
Warren said ministers must urgently come up with new plans: “This technology is critical for the UK’s economic, industrial and climate policies”.
Claire Jakobsson, the organisation’s head of climate and environment policy, said: “The cuts to the UK’s carbon capture and storage (CCS) funding are extremely disappointing”.
“In choosing to save a relatively small sum of taxpayer money in 2015, the Government is unnecessarily committing a vast amount of future energy consumers’ money”.
“This is yet another clear-cut example of the Government’s incoherent energy policy being played out”.
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Only this month the Energy Secretary Amber Rudd predicted that CCS could create jobs to the UK.
