The decision to axe the previously committed £1bn CCS commercialisation competition is extremely disappointing and a serious setback both in decarbonising the UK energy system and engaging industry and investors. CCS is the most important of the tools we have for progressing affordable decarbonisation of the UK energy system whilst maintaining security. Without early demonstration of CCS we are placing much greater reliance on our ability to rapidly deploy the other tools we have – renewables, new nuclear, bioenergy, low carbon heating and efficiency measures – most of which are yet to be proven to work cost effectively. This doubles the cost of meeting UK energy and climate change targets with substantial increases in system costs appearing from 2020 onwards.
The challenge now is to maintain the option of being able to apply CCS at a future date to the sites new power plants are built on in the coming years. This requires considered siting of plants so they can be economically linked to a future CO2 pipe network. CCS is a long term solution but time is running out for its full benefit to be felt at an energy system level from both an economic and emissions perspective.
ETI analysis of the UK’s future energy system has consistently highlighted the importance of CCS. Having the ability to use CCS halves the cost of meeting UK climate change targets because of its multiple applications – to power generation, energy intensive industrial processes and hydrogen production. Without nationally relevant CCS demonstrations in the next 10 years, the UK will have to rely on efficiency improvements to reduce demand and being able to build higher levels of nuclear and renewables to meet post 2030 energy security, sustainability and cost targets.