Letter: CCC advice on the approach to investment in fossil fuel power generation

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To: Rt Hon Chris Huhne MP
From: Lord Turner

Extract:

The path to meeting the UK’s 2050 target to reduce emissions by 80% requires that the power sector is largely decarbonised in the period to 2030 (e.g. average emissions should be around 100 g/kWh in 2030 compared to around 500 g/kWh currently).

This will require a coherent approach to phasing out of conventional fossil fuel (i.e. coal and gas) generation. Currently the Government has proposed an approach to phasing out of conventional coal power generation and replacement with coal Carbon Capture and Storage (CCS), but there is no proposal for phasing out of conventional gas fired generation and replacement with gas CCS.

This letter recommends a more balanced approach (i.e. covering coal and gas) to required power sector decarbonisation. Specifically, we recommend that:

  • Given new evidence on the potential competitiveness of gas CCS with other forms of low carbon generation, and the very limited international effort to develop this technology, serious consideration should be given to funding at least one gas CCS demonstration project as part of the four CCS demonstration projects committed to in the Coalition Agreement.
  • Given the need to decarbonise the power sector in the period to 2030, and therefore the very limited scope for investment in conventional gas generation beyond 2020, an Emissions Performance Standard that would effectively require any new gas plant beyond 2020 to be fitted with CCS should be seriously considered.
  • We are not proposing that an Emissions Performance standard should cover retrofit of plant added to the system in the period to 2020, given uncertainties over the economics of retrofit and the need for investment in conventional gas fired generation over the next ten years to maintain security of supply.

I am writing to you now in order to inform your thinking on design of the second competition for CCS demonstration, and design of an Emissions Performance Standard for possible inclusion in the recently announced new energy legislation.

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