Warning over delays to ‘clean coal’ scheme

By Ed Crooks and Fiona Harvey
Published: February 25 2009 02:47

Companies competing to build Britain’s first “clean coal” power station have warned that the project risks missing its target start date because of government delays.
Ministers have promised to back a large-scale demonstration of a coal-fired power plant that captures and stores its carbon dioxide emissions, and in 2007 launched a competition for companies to bid for funding. The government wants the plant to be operational by 2014, and says it is committed to developing a commercial-scale clean coal plant as quickly as possible.

Companies that have entered the competition, however, told the Financial Times they were worried the timetable had slipped. Some fear the Department for Energy and Climate Change is arguing with the Treasury over the project’s funding.
Ed Miliband, the energy secretary, will on Wednesday face questions on the issue from MPs on the Commons energy committee.
The industry expects the government to set out a new strategy for coal, which could include rules limiting the emissions from coal-fired power stations.
It could also make the carbon capture competition more generous, so that more than one project could be funded, and change the rules so that a proposal from Richard Budge’s Powerfuel in Hatfield, South Yorkshire, would be eligible.
A government official said on Tuesday: “We are determined to demonstrate carbon capture and storage technology and we will be making an announcement in the coming weeks about the next stages of that process.”
Industry executives fear a new strategy risks further delaying the carbon capture project in a fresh round of consultations.
Three groups are left in the competition: one led by Eon, looking at fitting carbon capture to part of its controversial new plant at Kingsnorth in Kent; one led by RWE Npower, for a new plant at Tilbury in Essex; and one led by Scottish Power, for its existing plant at Longannet in Fife.
All three say they are committed to their plans, and none is prepared to raise its concerns in public for fear of jeopardising its chances in the competition. Off the record, though, executives have expressed deep anxiety.
One said: “This competition is utterly imperative for delivering industrial-scale carbon capture and storage by 2020.
“For that there needs to be a large-scale demonstration project by 2014. We need the full resources of the government to deliver that, and there is a very real risk that a new coal strategy will stretch the project out or confuse it.”
Another said: “We are very anxious for clarity on a project that requires a huge amount of capital investment.”
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, said companies were “frustrated by the slow rate of progress”.
Industry was “keen to get on with it”, he added.
Copyright The Financial Times Limited 2009