Lowest Cost Decarbonisation for the UK - Cover
Lowest Cost Decarbonisation for the UK

Lord Oxburgh's report - Lowest Cost Decarbonisation for the UK: The Critical Role of CCS

SCCS welcomes the launch of the much-anticipated report on Carbon Capture and Storage (CCS) in the UK by the parliamentary advisory group led by Lord Oxburgh.

The report describes a six-point plan for delivering CCS in the UK, a technology that is essential to meeting the carbon targets envisaged by the Paris Agreement on tackling climate change. With the US and China having now ratified this pledge, there is pressure on the UK Government to follow suit and swiftly reaffirm its leadership in low-carbon ambitions.

Oxburgh lowest cost decarbonisation - Cover
Download the Oxburgh Report

Some background to the
Oxburgh report
Prof Stuart Haszeldine

Broadcast Coverage of
report launch

These ambitions were badly dented last November when the UK Treasury abruptly pulled funding for the long-running CCS Commercialisation Programme. The cost of delivery was given as the reason, incorrectly cited as being £180 per MW hour of electricity. But today’s report shows that CCS technology can be delivered at just £85/MWh over a 15-year period; a lower cost and faster delivery than nuclear power and comparing favourably to many renewable energy options.

If the UK’s CCS competition was considered an inefficient and costly way to deliver the technology, then the Oxburgh report sets out a new approach, which can bring huge financial savings and employment benefits and give UK industry a brighter future. The report concludes that CCS is essential for the UK to decarbonise its economy, not just power generation but also industry, heat and transport.

The report recommends the creation of a CCS Delivery Company, which will manage construction and risk for the first projects, similar to the successful delivery of the 2012 Olympics or the current Crossrail project. This would create transport and storage infrastructure, which can be privatised when properly established, and could cut the cost of meeting the UK’s climate targets by billions each year.

Prof Stuart Haszeldine, SCCS Director and report co-author, said:

What has been missing until now is the method for making CCS happen. The Oxburgh report sets out six clear actions, including the establishment of a CCS Delivery Company and linking CCS Certificates for CO₂ storage to contracts which incentivise CO₂ capture from heavy industry.

Through a delivery company, with regulated and reliable profits, the government can attract investors to provide the necessary infrastructure, and there are sites in the UK’s industrial heartlands, such as Grangemouth, Teesside and Mersey, where CO₂ resulting from industrial processes could be easily captured and transported by existing pipelines or shipping to offshore storage sites. These are the natural places to grow the first small CCS start-ups.

Once operating, a CCS system has value for other emitters and can be added to incrementally. The infrastructure itself has bankable value. Such networks are well understood by financiers in the UK and are regulated to reset prices at three to six-year intervals, providing a reliable financial return prized by investors.

With offshore pipelines already being decommissioned, actions that maintain infrastructure are needed immediately. Some pipelines can be taken into temporary public ownership while new CCS organisations are created. Using these, we could begin storing CO₂ commercially by the early 2020s.

Initial government support is necessary for low-carbon technology, such as CCS, to gain a foothold. Compare the subsidies that have enabled growth in the renewables sector. But we believe that initial investment need not be large. Just £300 million is enough for engineering design studies, which would unlock the investment needed to build a project. Once established, the CO₂ networks can be privatised and government investment recovered.

A new CCS Obligation system will create a market for CO₂ storage and ensure a long-term trajectory for decarbonising the UK economy. Trading CO₂ certificates linked to power or industry would not achieve the required reductions fast enough or have any longevity. By mandating a quantity of CO₂ to be stored each year, this creates a predictable and controllable pathway to ‘net-zero’ carbon by mid-century, which business can rely on.

The report can be downloaded from the above link and also from the CCSA website.

BBC Radio 4, Today programme, Mon 12 September 2016
Coverage of report launch, including interview with Lord Oxburgh

Good Morning Scotland, Mon 12 September 2016
Stuart Haszeldine interviewed by Gary Robertson on BBC Scotland’s Good Morning Scotland

STV News, Mon 12 September 2016
STV covers Oxburgh report findings and considers what this means for CCS in Scotland (Glasgow, Aberdeen and Edinburgh programmes)

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