CCS investors need EMR clarity

The next vital step in removing uncertainty for potential investors in Carbon Capture and Storage (CCS) projects, is to get clearer commitment from the Government on the future level of electricity returns for CCS-based developments.

That’s the view of Professor Jim Watson, lead author of today’s UKERC report: Carbon capture and storage: realising the potential? He wants to see an announcement on Electricity Market Reform (EMR) as soon as possible to encourage CCS investors to make the next move.

While welcoming the recent re-launch of the £1bn CCS demonstration fund, and release of the CCS roadmap, as the ‘right elements’ for progress, Prof Waton told that the total financial package behind CCS still gave cause for concern.

“Investors want to know what they’re going to get for the electricity they produce from CCS-based developments and they won’t know that until EMR is completed,” he said, adding that a tight deadline for demonstration applications and the current state of EMR didn’t match up. “As a result, there’s still a lot of uncertainty surrounding CCS.”

Prof Watson, who is director of the Sussex Energy Group at the University of Sussex, also commented on the report view that allowing new gas plants to remain CCS-free until 2045 was a ‘mistake’.

“A shorter commitment could have been given on this without damaging investor attitudes to gas projects,” he said. “A cut-off point of 2035, or even 2030, would have been sufficient for gas investors and better for CCS progress.”

Despite this, he repeated the report view that CCS was not yet at a stage where the technology needed to be made compulsory for all fossil plants. Such a step would only work once the technology is more advanced and when any additional costs can be ‘passed onto consumers’.

Edie staff

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