BERR announces next steps on carbon capture readiness and UK demonstration competition

On 30 June 2008 the Department for Business, Enterprise and Regulatory Reform (‘BERR’) announced the publication of a consultation on the legislative framework for carbon capture storage (‘CCS’), including carbon capture readiness, together with naming four bidders that have pre-qualified for the Government’s CCS demonstration project competition. This will be of interest to existing and future developers in the power sector, potential investors in the CCS sector and those contenders, who submitted their pre-qualification questionnaires at the end of March.

It is estimated that CCS has the potential to capture up to 90% of carbon emissions from coal-fired power stations. The Government views CCS as a ‘high potential’ carbon abatement technology and supports the deployment of CCS technologies as part of its wider strategy to reduce emissions from electricity generation. The strategy includes the expansion of renewable energy, allowing investment in nuclear new build and capping emissions from the power sector through the EU ETS.

‘Towards Carbon Capture and Storage’

In the consultation document, entitled “Towards Carbon Capture and Storage”, the Government asks for views on what more can be done to promote, develop and deploy CCS in the UK, the EU and globally, as well as seeking views on the definition of carbon capture readiness (‘CCR’) proposed in the draft EU Directive.

The proposals in the consultation document are designed to create a more consistent understanding of what carbon capture readiness means across the EU. They also mean that the carbon capture readiness of new combustion power stations will have to be addressed by developers in the design process and taken into account by the Government in deciding whether or not to grant consent to such power stations.

The document outlines the proposed EU CCS Directive and invites consultation on the principle of carbon capture readiness and the regulation of CO2 storage. The document also describes and seeks views on:

• what CCR means and to which combustion plants it should apply
• whether CCR should be addressed by developers when designing new combustion plant and be taken into account by the regulatory authorities when deciding whether or not to consent to such plant
• how any such requirement would be incorporated into the consenting process under section 36 of the Electricity Act 1989 in England and Wales

The four chosen bidders are BP Alternative Energy International Limited, EON UK Plc, Peel Power Limited and Scottish Power Generation Limited. Discussions between the Government and the four bidders in the next phase of the competition will cover technical, commercial, contractual and financial issues. The aim is to have the project operational by 2014 and the Government’s ambition is to see CCS ready for commercial deployment by 2020.

To access the consultation document, please click here.

To access our previous Law-Now on the EU’s proposed regulatory framework for CCS, please click here.

To see our previous Law-Now on the main features of the Energy White Paper tackling climate change and security of supply, please click here.

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