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Investment in UK energy 'damaged' by CCS withdrawal

A group of MPs has said the government’s decision to pull support for carbon capture and storage (CCS) technology will deter investment in the UK and make it difficult to adhere to recently agreed upon climate targets.

In November, £1bn in funding for further development of projects using the technology in the UK was scrapped following the Autumn Statement.

A report by the parliamentary Energy and Climate Change Committee (ECCC) has claimed that the UK will not meet its binding climate targets at the lowest cost, especially considering its recent approvals for a number of gas extraction projects.

In December, it was agreed at talks in Paris that countries would limit their activities so that the average global temperature does not increase more than 2°C beyond pre-industrial levels with ambitions to limit this to 1.5°C.

Building the transport and storage infrastructure needed to implement CCS requires large upfront investment, but the cost of later projects is expected to fall rapidly once that is in place.

The ECCC also said that the way in which the government pulled the plug without warning ‘was damaging both to the relationship between government and the industry, and to investment into the UK’.

It called on the Government to develop ‘promptly’ a new strategy for CCS in conjunction with a new gas strategy.

The Committee’s chairman Angus MacNeil said: "If we don't invest in the infrastructure needed for carbon capture and storage technology now, it could be much more expensive to meet our climate change targets in the future. Gas-fired power stations pump out less carbon dioxide than ones burning coal, but they are still too polluting.

"If the government is committed to the climate change pledges made in Paris, it cannot afford to sit back and simply wait and see if CCS will be deployed when it is needed. Getting the infrastructure in place takes time and the Government needs to ensure that we can start fitting gas-fired power stations with carbon capture and storage technology in the 2020s."

Professor Jim Watson, director of the UK Energy Research Centre, believes that CCS will be increasingly important with the country’s move towards gas to produce electricity. He said the cost of the technology will only fall with government support and a "learning by doing" approach.

The Department of Energy and Climate Change (DECC) said it has not "closed the door" on CCS technology in the UK, but that difficult decisions have had to be taken as part of the drive to get Britain's finances "back on track".

"CCS should come down in cost and we are considering the role that it could play in the long-term decarbonisation of the UK,” said a DECC spokesman. "We are committed to meeting our climate change targets in a way that is affordable and provides secure energy to our families and businesses."

Garry Graham, deputy general secretary of the Prospect union, accused the government of not understanding the energy challenges facing the UK and of dampening industry confidence in the UK energy sector.

Last month, the Scottish National Party (SNP) accused the government of contradicting itself over the potential for CCS to lower emissions with Prime Minister David Cameron and Energy Secretary offering conflicting statements on the technology.

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