In the absence of any fine detail, we must assume that this includes Carbon Capture and Storage (CCS), and in particular support for the two remaining projects in the £1 billion UK Commercialisation Competition.
The UK has the world's best confluence of factors to develop a secure supply of low-carbon electricity using CCS, and to develop that very rapidly indeed. The UK can also press home its commercial advantage in providing engineering and commercial design and consultancy services for CCS developments internationally.
It is clear from the Secretary of State for Energy and Climate Change’s announcement last week that the UK is choosing a gas-fuelled pathway for electricity supply during the 2020s. It is also clear that the UK cannot meet its reduced carbon budget in 2027 and in 2032 unless CCS is fitted on these gas plants in the UK.
The Peterhead CCS Project is unique in the world in fitting CCS to a gas-fuelled power plant. The project additionally opens up the opportunity of commercial carbon storage in the central North Sea, where a legacy of pipeline infrastructure and decades of geological knowledge will enable follow-on developments to occur rapidly. The White Rose CCS Project offers a great opportunity to enable the continued use of low-cost coal to supply electricity and heat at an extremely low emissions rate.
If the UK is to deliver a low-carbon energy future it must avoid being locked into the carbon emissions from any new gas power plant. This means CCS is not an optional extra for the electricity sector but must become “business as usual”. And the learnings from Peterhead will be essential to the development of these subsequent CCS projects.
Commercial incentives may also include the ability to use captured CO2 in extracting an additional 5% to 15% of oil in place from such some of the UK’s largest oilfields, at a particularly vulnerable period in their lifespans.
Prof Stuart Haszeldine, SCCS Director, said: “Delivering secure electricity on demand at a reliable price can be uniquely achieved through carbon capture and storage. The UK is the world's best country in which to do that. Overall, the Chancellor’s speech offers excellent and sensible support to maintain the research budget needed to fully realise CCS and other low-carbon innovation. Research is one of the UK’s most successful industries and we welcome the increased investment in Catapult Centres and the enabling of company support to Innovate UK partnerships, which help commercialise the UK’s research and development.”