EU spending spree brings carbon capture closer to reality

Europe-wide plan proposes €1.25bn for carbon capture at coal-fired power plants; €1.75bn earmarked for better international energy links
David Gow in Brussels
guardian.co.uk, Wednesday 28 January 2009 17.00 GMT

The European commission today proposed earmarking €1.25bn to kickstart carbon capture and storage (CCS) at 11 coal-fired plants across Europe, including four in Britain.
The four British power stations – the controversial Kingsnorth plant in Kent, Longannet in Fife, Tilbury in Essex and Hatfield in Yorkshire – would share €250m under the two-year scheme.
CCS involves capturing CO2 at power stations and burying it in disused oil/gas fields or other undersea rock formations. It is seen by Gordon Brown and other EU leaders as vital to ensure Europe's energy security, while reducing emissions, in the wake of the recent Russian-Ukraine gas crisis and the emergence of "peak oil". Europe will get most of its gas from Russia by 2050 on current trends.
The €1.25bn for CCS is part of an EC proposal to use €5bn of unspent money in the EU budget on immediate investment in energy and rural development, including broadband infrastructure this year and next.
The overall package is designed to help reboot the EU economy in the deepening recession and EC officials hope it will be adopted at the bloc's March summit. Jose Manuel Barroso, EC president, called it "smart" investment – "a short-term stimulus targeted on long-term goals".
The four British coal-fired plants can generate 6.3GW of UK power, while a quarter of Britain's overall 78GW is under threat of closure under other EU plans to improve air quality. The government has warned these could lead to black-outs from 2015.
Wednesday's package would also earmark €1.75bn to improve gas and electricity interconnections between EU countries, including €100m for electricity links between Ireland and Wales, and €500m for offshore wind projects, including €40m for an 0.25GW wind farm near Aberdeen.
It also includes €150m set aside to develop an offshore wind grid in the North Sea to link Britain, Holland, Germany, Ireland and Denmark – a project backed by campaigners such as Greenpeace as well as governments.
The package would also provide €250m in loan guarantees, backed by the European Investment Bank, for the stalled Nabucco gas pipeline between the Caspian region and Europe.
The pipeline, a 3,300-km route from Anatolia in Turkey to Austria, has been dismissed as unrealistic and is said to face its "moment of truth" over the next few weeks because of lack of funding – and guaranteed gas supplies from Azerbaijan.
EC officials said today the aim was to create a "risk-sharing facility" with the EIB to raise loans for the project on better (cheaper) terms rather than providing direct subsidies.
Russia, which is building the rival South Stream pipeline, opposes Nabucco; the US has been a fervent supporter to reduce EU dependence on Gazprom gas.
Stuart Haszeldine, a CCS expert at the University of Edinburgh, said: "This is totally exceptional and unique, a major move on the part of Europe. It shows they're extremely serious about developing CCS and it's what the developers have been pressing for."
But Claude Turmes, the Green party's energy spokesman in the European Parliament, denounced the overall energy package as "inadequate and unbalanced" and "a handout to outdated energy sources and the companies that profit from them." He contrasted the "bloated" €3bn for coal and gas development and the "meagre" €500m for renewable wind energy.
"This represents a golden handshake from Barroso for technologies that should be on their way out instead of a much-needed commitment to clean energy and energy saving," he said.