News from around and about the Industry (updated July 8th 2008)

NEXT STEPS ON CARBON CAPTURE READINESS AND UK DEMONSTRATION COMPETITION
With acknowledgments to Rod Dean

The four bidders that have pre-qualified in the Government carbon capture and storage (CCS) demonstration competition were named by Business Secretary John Hutton today. He also announced publication of a consultation on the legislative framework for CCS, including carbon capture readiness.

Proposals in today consultation document on carbon capture readiness are designed to create a more consistent understanding of what this means across the EU. The proposals mean that the carbon capture readiness of new combustion power stations will have to be addressed by developers in the design process and taken into account by the Government in deciding whether or not to consent to such stations.

CCS has the potential to capture up to 90% of damaging carbon emissions from coal fired power stations. The steps that we are taking to prepare for and support the deployment of CCS technologies are part of a wider strategy to reduce emissions from electricity generation - which include the expansion of renewable energy, a decision to allow investment in nuclear new build and capping emissions from the power sector through the EU ETS.

BP Alternative Energy International Ltd, EON UK Plc, Peel Power Ltd and Scottish Power Generation Ltd were selected from nine contenders based on their responses to the pre-qualification questionnaire, submitted to the Department for Business at the end of March.

Discussions in the next phase of the competition between the Government and the four bidders will cover technical, commercial, contractual and financial issues. The project continues to be on course to be operational by 2014 - making the UK one of the first countries in the world to demonstrate CCS on a commercial-scale.

Energy Secretary John Hutton said:
"Alongside nuclear, renewables and gas, coal is and will continue to be a feature of the UK electricity mix. The progress we are making with the CCS demonstration competition and on developing a sound legislative and regulatory framework will help to deliver our ambition to see CCS ready for commercial deployment by 2020. We have received an excellent response from industry to this competition - indicating their commitment to the clean energy agenda.
"We cannot deliver wide-scale deployment of CCS, nor tackle global climate change, alone. We need greater international collaboration and will continue to urge other countries to demonstrate a similar level of commitment to demonstrating CCS as the UK. We must ensure CCS is recognised in the EU Emissions Trading Scheme and the Clean Development Mechanism, and have been pushing hard for it to be high on the agenda at the forthcoming G8 Leaders meeting."

The consultation document published today - "Towards Carbon Capture and Storage" - sets out the Government view on CCS as a high potential; carbon abatement technology and asks for views on what more can be done to promote, develop and deploy CCS in the UK, EU and globally.

The document outlines the proposed EU CCS Directive and invites consultation on:

• the principle of carbon capture readiness
• the regulation of CO2 storage

As part of the Government commitment set out in the Energy White Paper, the consultation seeks views on the definition of carbon capture readiness (CCR) proposed in the EU draft Directive. It describes and seeks views on:

• what CCR means and to which combustion plants it should apply
• whether CCR should be addressed by developers when designing new combustion plant and be taken into account by the regulatory authorities when deciding whether or not to consent to such plant
• how any such requirement would be incorporated into the consenting process under section 36 of the Electricity Act 1989 in England and Wales

The UK is a leader in driving forward the deployment of CCS technology. In addition to the UK commercial scale CCS demonstration competition the Government continues to support a number of small-scale carbon abatement projects, including R&D and was recently confirmed as the host for the high profile Carbon Sequestration Leadership Forum Ministerial Conference in 2009.

Department for business, enterprise and regulatory reform News Release (2008/132) issued by The Government News Network on 30 June 2008.

Tel: +44 (0)1256 356 565 | Fax: +44 (0)1256 812864 | opportunities@lingmanagement.com