CCS: Energy firms seek opt-outs over 2025 carbon capture deadline

Power companies to ask the government not to force coal-fired plant closures in 2025 if carbon capture technology is not ready
Tim Webb
guardian.co.uk, Monday 11 May 2009 16.25 BST

Energy companies will lobby the government for a get-out clause from the deadline to fully fit carbon capture and storage (CCS) technology to new coal plants by 2025 because they are worried it might not work in time.
Companies, including German-owned groups E.ON and RWE npower, want guarantees that they will not be forced to close their coal-fired plants in 2025 if the technology has not been proven by then.
They will call on energy and climate change secretary, Ed Miliband, to draw up provisions which would allow them to keep the plants open until 2030, or for an additional number of operating hours. The utilities are warning that without firm guarantees, they will not invest in a new generation of cleaner coal plants which are crucial to keeping the lights on in Britain over the next decade.
Environmental groups warned Miliband against watering down his radical policy on coal power, which proposed far tougher measures to curb carbon emissions than many expected.
John Sauven, the executive director of Greenpeace, said: "CCS technology is still fraught with uncertainties. If Miliband doesn't show the necessary leadership to completely rule out unabated coal, then all the evidence suggests that's what we'll get.
"Ed Miliband must stand firm against the big power companies lobbying for loopholes and get-out clauses."
Last month, Miliband announced that any new coal plant would have to have CCS technology fitted to about a quarter of the plant from the outset.
All new coal plants would be required to have the technology fully fitted within five years of it being proven.
Miliband said in a statement to the Commons: "We will plan on the basis that CCS will be technically and economically proven by 2020."
In public, energy companies welcomed Miliband's proposals. While they are confident the technology can be made to work, in private some harbour doubts about how feasible it is to fully fit by 2025 and are concerned that they will have to foot the bill if they cannot.
One executive said: "If you are going to spend billions of pounds building a new power station which could be online in 2015 – if you are only going to get 10 years out of it, it's not going to be worth it."
Companies are also warning that switching off up to 6GW of coal plants in 2025 – enough to power 6m homes – if CCS is unworkable by then, would threaten the UK's security of supply.
There is also disquiet within the ienergy ndustry about the role of the Environment Agency, headed by Lord Smith (the former Labour minister Chris Smith). Miliband said the agency would judge whether CCS technology was technically and commercially feasible.
Some companies believe the EA does not have the relevant expertise or business know-how to make that decision and would prefer a body, like energy regulator Ofgem, to act as an independent judge. One executive said: "Imagine a company saying to investors, "let's spend billions building a coal plant, but don't worry, the EA will tell us whether we can get a return on our investment or not".
When Miliband announced the proposals, he said he would "seek views on whether we need a safety net in the eventuality that it [CCS] does not become proven as quickly as we expect".
The consultation – where both environmental groups and energy companies will rigorously press their cases – will be launched in the next few weeks.
The requirement to fit carbon-capture technology does not cover existing coal plants which will remain open into the 2020s and beyond.
This includes Drax, the Yorkshire coal plant which provides about 7% of Britain's electricity and is the single biggest source of carbon emissions in Britain.