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Carbon Capture and Storage

Volume 503: debated on Thursday 7 January 2010

2. What his most recent assessment is of progress in the competition to build a commercial scale carbon capture and storage power plant in the UK; and if he will make a statement. (308887)

We are currently evaluating two bids to select, which will receive funding from the £90 million set aside for the front-end engineering and design stage, with the result to be announced shortly. This is one of the four demonstration projects to which we are committed, funded by the levy for carbon capture and storage under the Energy Bill, which will ensure the largest investment in CCS of any country in the world.

I am grateful to the Secretary of State for his answer. He recognises, as does the whole House, the importance of this work in creating jobs, apart from anything else. However, he will also know that we have fallen behind China, Australia, Canada, Germany, Norway and Belgium because we have been so late in developing this technology. When are we going to start doing something?

This is a line that the Opposition like to peddle, but it is absolutely untrue. One need only look at what has happened since 2007. We have had the pre-qualification phase and the application phase for these projects. Hundreds of pages of applications have come into our Department and are being scrutinised, as one would expect in any procurement project. We have a CCS levy before this House; we have agreement in Europe for up to 12 demonstration projects, pushed by the United Kingdom; we have a commitment in this country to four demonstration projects, which we have not had before; and we have legislation in the Energy Bill for the storage of carbon dioxide from CCS projects. We are making progress. Indeed, there is as yet no post-combustion project in the world on the scale that we are talking about in this country.

The Secretary of State will know that burning coal cleanly is important both in his constituency and in mine. He will also know that there are plans to extend that process at Harworth colliery, but a loan from the European Investment Bank cannot be made until a guarantee of clean coal technology is available for that coal. What can he do to help the men at Harworth?

As my hon. Friend will be aware, we have been in touch with the European Investment Bank and continue to have dialogue with it about these matters, including the specific issue that he mentions. As we look forward to carbon capture and storage in this country, it is important to say that there is also a role for indigenous coal. My Department is very clear about that, and we do all we can, working with others, to support that process.

The Secretary of State’s fellow Ministers have heard the evidence given to the Public Bill Committee on the Energy Bill this week, with people describing the need for regulatory certainty if we are going to get investment in this new technology. Industry and environmental groups all agree that the terms for investment must be set for decades, not just the next few years, so will the Secretary of State agree that the Government should now take powers to set an emissions performance standard for a maximum level of emissions for new fossil fuel plant, as proposed by ourselves, the Liberal Democrats, many of his own parliamentary colleagues and many outside, to provide that regulatory certainty and show a real commitment to a low-carbon economy?

Obviously, we will look at any proposals that come forward, but I say to the hon. Gentleman—perhaps he has not followed the matter as closely as he might have done—that we have unveiled the most environmentally stringent conditions for new coal-fired power stations of any country in the world. We consulted on them and we have now put them into national policy statements. The proposals have been widely welcomed, both by the green groups that he mentions and by energy companies, as striking the right balance. A plant-level emissions standard could also have a role. As I understand it, the Environment Agency already has powers to introduce one, but we will examine any proposals that come forward.

Does my right hon. Friend agree that pre-combustion carbon capture has the advantage of producing chemicals, especially hydrogen, and that we ought to encourage commercial interests in that area as well as in post-combustion carbon capture? Has he had any negotiations with BP, which pulled out of the Peterhead experiment?

I think I am right in saying that the Peterhead proposal was for a gas-fired power station. Our concentration in spending significant amounts of money has been on coal-fired power stations. However, my hon. Friend is right to say that pre-combustion has an important role. We have said that of the four demonstration projects up to two will be pre-combustion, precisely because we recognise the importance of that technology. It is important to say that as we spend a significant sum on carbon capture and storage—as I said, it is the largest sum spent by any country in the world—we need to test all the technologies to drive it forward, including pre-combustion.

In evidence to the Public Bill Committee on the Energy Bill, some witnesses have suggested that the 2014 target of having a demonstrator up and working is just one of the conditions and may be allowed to slip. Can the Secretary of State assure us that it will be a principal condition that the demonstrator must be up and working by 2014?

As I think I have said in previous answers on this matter, that was set out as one of the conditions for the demonstration project and remains one of the conditions, and we are certainly considering that closely as we consider the bids that have been put forward.