No new coal without CCS in the UK, says government

The government has today announced the beginning of the end for traditional coal-fired power in the UK, confirming that it would block any plans to build new coal plants without carbon capture and storage (CCS) technology.

In a surprise move, climate change secretary Ed Miliband said that from today any new coal-fired power station must have CCS capabilities on at least 400MW of its output – about a quarter of the output of an average power station – from its first day of operation.

He added that new plants would also have to demonstrate that they will fit CCS systems capable of capturing 100 per cent of their carbon emissions by 2025.

"Once the technology has been judged as proven, every new coal-fired power station would have to commit to CCS not just on a portion but on the whole plant," he explained.

The proposals are likely to split environmentalists, some of whom believe they could be used as the justification the government needs to give the go-ahead for the controversial proposed coal-fired plant at Kingsnorth in Kent.

Miliband also provided further details of new plans for at least three plants demonstrating a mixture of pre- and post-combustion CCS technologies, announcing that the government was considering introducing a feed-in tariff that would force energy companies to pay an above-market price for energy generated by CCS plants.

Early Whitehall estimates suggest such a tariff would add two per cent to electricity bills between now and 2020. But Miliband defended the price rise, saying it would lead to lower bills in the long run. "There would also be an upward pressure on prices with a hard carbon route," he argued. "British domestic electricity consumers will eventually benefit from this."

A further €300m (£269m) of investment for the new plants is expected to come from the EU, while the government said it could also raise extra funding through the auction of allowances in Phase III of the emissions trading scheme after 2013.

In addition to ensuring all new coal-fired plants have CCS technology, the climate change secretary also said that the government would consider imposing an emissions performance standard on individual power stations if the technology is not adopted as quickly as hoped.

The proposals are broadly in line with those recommended by the independent Committee on Climate Change which concluded that "conventional coal-fired power generation should only be built on the expectation that it will be retro-fitted with CCS by the early 2020s".

Miliband said he had faced calls from some quarters for CCS on 100 per cent of emissions of all new power stations, but argued such a move would reduce the range of technologies that could affordably be demonstrated. "I believe that [these calls] do not fully appreciate the need that still exists to demonstrate the technology before full-scale commercial deployment is possible," he said.

The government also confirmed that CCS demonstration plants will be developed in clusters, so as to share the infrastructure used for transporting and storing carbon in the North Sea – a move welcomed by the National Grid chief executive Steve Holliday.

"Transporting carbon dioxide is the vital third element alongside capturing the emissions at the power stations and storing it offshore, so we welcome the government's focus today on clusters of CCS projects sharing pipeline networks, " he said.

The proposals also secured support from TUC general secretary Brendan Barber, who said that the insistence that all new plants must have CCS would help the UK develop technologies and skills that it will be able to export to other coal-rich countries, such as China and the US.

"These proposals will place the UK at the forefront of the development of a technology and industry that can deliver really deep cuts in carbon across the globe," he said. "There will be financial costs but the longer-term benefit of this move to the UK’s economic growth and employment will be great."

E.ON, the energy company behind the planned new plant at Kingsnorth, was not available for comment at the time of going to press. The company had been waiting for clarification from the government on whether or not its proposals are deemed "CCS-ready" before continuing with the project.