Government efforts to encourage the construction of coal-fired power plants with carbon capture and storage (CCS) technology will fail unless more subsidies are offered, consultants warned this week.
Energy secretary Ed Miliband said he hoped to have “up to four” CCS projects up and running by 2020, with all new coal plants made ready to have CCS retrofitted by 2025.
Miliband was speaking as he launched the government’s framework for CCS in parallel with the first National Policy Statements on infrastructure.
“Gas plants are cheaper to build, so remain a much more attractive alternative.”
Stuart Haszeldine, professor of geology
Under the framework, a levy on electricity suppliers will be put in place until 2020 to cover the costs of trial CCS plants. It will be extended to 2025 if the price of carbon is not high enough to cover retrofitting new plants.
Consultants fear that the levy will not match the uncertainty of developing plants with CCS installed, making coal-fired plants less financially viable than gas-fired ones. CCS does not have to be fitted to gas plants, as they emit less emissions.
Professor of geology and CSS expert Stuart Haszeldine said the only way to drive CCS was to ensure that gas plants which do not have to use CCS also have the technology imposed.
“Here, there will be a disincentive to build coal plants. Gas prices are low and are forecast to fall further. Gas plants are cheaper to build, so remain a much more attractive alternative,” he said.
A Department for Energy and Climate Change source admitted that the government could do nothing to make suppliers build new coal plants.