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The Department of Energy and Climate Change (Decc) has scrapped its £1 billion competition to help develop technology for carbon capture and storage (CCS).
In a statement to the London Stock Exchange on Wednesday, Decc said: “Today, following the chancellor’s autumn statement, the 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.”
Decc was not immediately available for comment.
The competition was launched in April 2012 to identify and support projects that can contribute to reducing the costs of CCS technology so that it can compete with other low carbon technologies in the 2020s. The two preferred bidders, White Rose and Peterhead, were announced in 2013 and 2014 respectively.
CCS involves capturing the CO2 generated by power stations and large industrial processes and injecting it at high pressure deep underground for storage in the microscopic pores of suitable rock formations, where it can be kept securely away from the atmosphere.
Former energy secretary Ed Davey was an advocate of the technology, insisting it was “crucial in helping us meet our ambitious climate change goals”.
The Scottish and UK governments announced in March that they would invest £4.2 million to assess the feasibility of a 570MW carbon capture and storage (CCS) coal-gasification power plant in Grangemouth, Scotland. At the time, Davey said developing CCS more widely is “vital” if it is to become cost-competitive technology.
However, the government’s support for CCS was called into question when a recent shift in energy policy caused Drax to cancel plans to develop the White Rose CCS project beyond the initial development phase.
Drax operations director Pete Emery said at the time: “The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first.”
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