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Carbon Capture and Storage

Volume 555: debated on Thursday 13 December 2012

3. What assessment he has made of the role of carbon capture and storage in the development of future energy strategy. (133320)

It is a pleasure to answer a question from my hon. Friend the Member for Sherwood, the Robin Hood of his age. Carbon capture and storage has the potential to play a crucial role in our future low-carbon energy mix, allowing us to benefit from the flexibility of fossil fuels without associated emissions. As set out in the annual energy statement, the Government are committed to working with industry to create a cost-competitive CCS industry in the UK, and to make that happen we have introduced one of the best support packages in the world.

What a privilege it is to receive an answer from the Minister who has won the award of Minister of the year! Does he agree that CCS gives us the opportunity to make use of coal, which offers us 200 years-worth of supply, flexibility within the market and the ability to produce our energy very cheaply? Will he come and have a look at the coal industry in Sherwood?

When I think of Nottinghamshire I think of my hon. Friend, and when I think of my hon. Friend I think of Nottinghamshire—how proud each must be of the other. He is right to say that carbon capture and storage can play a role in delivering clean coal, and three of the four projects we are supporting in our £1 billion competition are coal projects. I know that he visited Thoresby colliery in his constituency just a few weeks ago, and he will understand that CCS is crucial to our ambitions to deliver energy security in a way that reduces emissions.

The Government have not met the deadline for the first stage of European Union funding for CCS, yet the gas strategy looks to the construction of about 30 new gas-fired power stations. Will the Minister tell me how many of those are likely to have CCS fitted from the outset?

The hon. Gentleman says that we did not benefit from European funding in the first stage. In anticipation of this scrutiny, I spoke to the European Commissioner for Climate Action just yesterday evening, making it very clear that we hope for—indeed, we expect—European support for the work we are doing. It was a very positive call. I assure the hon. Gentleman that we will work with Europe to ensure that both what we do and what is done across Europe supports the development of world-beating CCS.

In his discussions with the EU Commissioner yesterday, did the Minister have the chance to raise the case of Germany? It burns about 25% more carbon per head than the UK, yet has just decided to go ahead with 23 unabated coal power stations, which will increase that differential still further.

I would never be so impertinent as to raise the policy of another sovereign state in such a call. However, my hon. Friend is right to say that the future of coal is clean coal. That is the way forward and it is why we are running our £1 billion competition. May I draw the House’s attention to the conclusion of the UK CCS cost reduction task force, whose members I met yesterday afternoon? It has said clearly that coal power stations equipped with CCS have

“clear potential to be cost competitive with other forms of low-carbon”

technology.

In his evidence to the Liaison Committee earlier this week, the Prime Minister talked about the importance of CCS in relation to gas and coal generation, saying:

“Here are some funds. Let us have demonstrator projects and all the rest of it.”

The “all the rest of it” is the European Commission saying in correspondence to me that the UK did not secure up to €600 million of match funding because the Treasury would not confirm co-funding. It is also the Cabinet Office project assessment review—it is previously unpublished but I have obtained a copy—stating that “only” £200 million is “available”. How does the Minister expect there ever to be progress in developing commercial CCS if the Government’s financial commitment falls so far short of the Prime Minister’s warm words?

I can tell the hon. Gentleman, although I am in a sense disappointed to do so, because he will not have been privy to the information I gave the House until I provided it a few moments ago, that that was not the reason given by the European Commissioner—[Interruption.] The Commissioner did not say that to me in our telephone conversation. Indeed, the hon. Gentleman will know that in that first round no CCS project received support—there was some thought that a French project might, but in the end it did not. The second round will begin next spring and will be completed next year. I have made it very clear that we will work as a Government, with Europe, to ensure that our projects have the very best chance of receiving that additional funding.