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Energy: Carbon Capture and Storage

Volume 731: debated on Wednesday 2 November 2011

Question

Asked By

To ask Her Majesty’s Government what are the prospects for carbon capture and storage after the withdrawal of the Longannet project.

My Lords, the prospects for carbon capture and storage in the UK are good. We have six other applicants in the European new entrants’ reserve 300 competition. Through FEED, we have developed substantial practical guidance on the delivery of CCS projects. We will launch a streamlined selection process for future CCS projects as soon as possible and expand on our plans in the next eight weeks. I can confirm that the £1 billion remains available for this.

My Lords, while it is regrettable that the Longannet project has been withdrawn, it is satisfactory to note that these other projects are coming forward and, in particular, that the Government will speed up the selection process. Would the Minister agree that a successful demonstration of carbon capture and storage on a commercial scale could not only reduce carbon emissions but also lead to the creation of many new jobs and substantial overseas earnings?

My Lords, it is difficult to disagree with any single word that the noble Lord, Lord Ezra, said. He is obviously a leading expert in the field. It is gratifying to hear him make a statement like this and be so supportive of the Government’s plans.

My Lords, is it not clear that the withdrawal of the Longannet proposal demonstrates what most people who have studied this know, that carbon capture and storage is a lovely idea but is both technologically improbable and economically prohibitive? Is it not about time, when there is great financial and public spending stringency, that the Government stopped throwing money at this lost cause?

My noble friend Lord Lawson makes several good points. The reality is that that is why, having been the negotiating Minister for the project, I decided to call a stop to it. I felt that the financing for this particular project was going off the dial. We have been given an envelope with which to invest, one that is more than generous for the prospect. It is part of the coalition agreement and there is support from all sides of the House that we press on with this groundbreaking technology. Britain is famous for groundbreaking technology and we should—and will—continue to invest in that.

My Lords, I declare an interest as a member of the Engineering and Physical Sciences Research Council. Does the Minister agree that it is likely that there will be a considerable use of fossil fuels, particularly coal, in many parts of the world and there is clearly a commercial advantage in Britain being first? Would he remind the House how much money we spend on research in this area through the research councils? Does he feel that that is sufficient money in view of the importance of this area?

I can only talk about what the Government have spent in FEED, which is their investigative, exploratory work on this. To date, we have spent more than £60 million—quite a significant figure. As I said earlier, we have committed £1 billion to the project. We will learn even more as we go into the next project and I hope that we will be successful.

My Lords, I very much welcome the renewed commitment of the Government and my noble friend to carbon capture and storage in future. Will the Government look at fossil fuels other than coal? How do they see co-operation with other nations, for instance China, in developing this technology to our mutual benefit?

I am grateful to the noble Lord, Lord Teverson, for his very good points. The reality is that if we all had our time again we would start on gas, which is going to be fundamental to the future of our energy supply. I am at one with the noble Lord, Lord Lawson, on this, for a change. I very much hope that in the next competition we will have a lot of applicants for a gas project and that we can become world leaders in its carbon capture and storage.

My Lords, does the Minister agree with me that of course all these low-carbon energy approaches are risky and expensive? This is further evidence that for CCS this is particularly the case. We have had our two large projects stopped; it could be incredibly expensive and feasibility is far from demonstrated. Does not that teach us that we had better get on with nuclear power in a more aggressive way and expand our nuclear capability?

I am delighted to say that on 31 October EDF put its 30,000-page document in for planning for the first new nuclear power station to be launched for 27 years. I can only totally agree with the noble Lord.

My Lords, I am very grateful for the Minister’s comments about gas. It is certainly true that if we could be back in time we should have had a much broader approach to the competition. How does the Minister intend to communicate to the Treasury the lessons learnt from this negotiation? This is an important technology and cannot be done on the cheap. We must provide sufficient funds to get this technology out and proven, so that we can become a world leader in it.

I am very grateful for the support of the noble Baroness, Lady Worthington. I can confirm that the Treasury has agreed to £1 billion of support for this, in addition, one hopes, to European money for which we are applying. In my own view, that is a very significant figure in these current times to support this project.

My Lords, the Minister indicated in his Answer that European funding may be available for CCS. Given the collapse of Longannet, will the UK still be able to meet the timescale for that funding, and can that funding be used for capital support for carbon capture and storage projects in this country?

I can confirm to the noble Baroness that that is the case. I would not say that Longannet has collapsed; we have merely said that we are not going to proceed with it. But I can confirm that that is the case.