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UK carbon capture dream ends after EU cash refused

Posted on 12 November 2012

A failure by the British government to provide details of funding
guarantees means that none of the carbon capture and storage (CCS)
projects it put forward will receive funding from the European Union.

According to Chris Davies, the Liberal Democrat MEP who led
discussion of the funding in the European Parliament, an EU official
speaking on condition of anonymity said the reason for the decision was
“a lack of funding detail".

A spokesman for the Department of Energy and Climate Change (DECC)
said it had not been informed of the decision and refused to comment.

Under the NER300 competition, governments of Member States propose
CCS and renewable energy projects for financial support from sale of
greenhouse gas emission allowances from the EU European Emissions
Trading Scheme by the European Investment Bank.

Chris Davies said the failure was "a devastating blow" to British hopes of becoming a world leader in CCS technology.

"The government has no excuse,” he said. “The EU funding mechanism
was only introduced as a result of British pressure and for us not to
take advantage of it is simply woeful."

CCS, which captures carbon emitted from the generation of electricity
by burning fossil fuels and places it underground, is supposed to play a
key part in the British government's plans to meet its carbon emission
reduction targets, especially under the Energy Bill.

Funding details may have been omitted from the application to the EIB
pending finalisation of the contents of this Bill, which is due at the
end of this month, and which is the subject of continued conflict
between the Treasury and DECC.

"That's nearly £500m of investment in northern England and Scotland
that George Osborne just threw away," tweeted Chris Davies on hearing
the news.

The government submitted two projects
at the end of October: Progressive Energy consortium's pre-combustion
coal gasification project on Teesside and Alstom's 'White Rose' oxyfuel
capture system at Drax's proposed new 304 MW coal-fired power station in
North Yorkshire.

It is not clear if the same decision applies to the Sound of Islay
tidal renewable energy project that was put forward for funding by the
Government.

Britain's attempts to become a world leader in this currently unproven technology is now in a complete shambles.

Firstly, a previous competition which it held to fund pilot schemes
fell apart over a year ago, as it proved too expensive and had to be
relaunched.

There was no shortage of applicants in the second round, but, to much
astonishment, the favourite project was not selected by the government
last month. This was the Don Valley Power Project, which had already
earned first place among all NER300 CCS proposals.

DECC might have taken this unexpected decision because it wanted to
maximise the UK’s overall financial return from NER300. NER300 support
for Don Valley would have amounted to €130m only, while the project
replacing it, UK Oxy CCS Demo, would have got funding of €337m.

Now it looks like DECC won't get any funding at all.