Carbon limits imposed on new coal plants

LONDON Thu Apr 23, 2009 11:39pm BST

The sun rises behind Fiddlers Ferry coal fired power station near Liverpool, northern England, December 15 2008. REUTERS/Phil Noble

The sun rises behind Fiddlers Ferry coal fired power station near Liverpool, northern England, December 15 2008.

Credit: Reuters/Phil Noble

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LONDON (Reuters) - Britain announced on Thursday plans to force all new coal plants in the country to test a pioneering carbon-cutting technology, as it tries to sharpen efforts to meet steep climate change targets.

The move would make Britain the first country to require coal plants to fit carbon capture and storage (CCS), still unproven on a commercial scale.

Initially, new plants would have to apply CCS to only about a quarter of power production rising to all output by 2025, Energy and Climate Minister Ed Miliband told parliament.

The government would fund up to four CCS test plants -- including one previously announced -- said Miliband, on measures which won support from analysts and some green groups.

"We need to signal a move away from the building of unabated coal-fired power stations," he said.

CCS traps and then buries underground the carbon dioxide which power plants produce as a result of burning fossil fuels, and so cuts emissions of the main greenhouse gas blamed for global warming.

Fossil fuels are expected to continue to provide the bulk of energy for modern life worldwide for many years, explaining the urgency to develop a low-carbon fix.

CCS adds about $1 billion to the cost of a power station. Funding for the test plants would be raised either by a premium on electricity produced or a payment per unit of carbon stored.

That would raise consumer power prices by about 2 percent by 2020. The first test should be up and running by 2015, Miliband said, on proposals the government is now consulting on.

WELCOME

Supporters want Britain to lead a CCS race already involving Australia, Norway, the United States and Canada.

"It's extremely welcome," said Stuart Haszeldine, a CCS expert at the University of Edinburgh.

"Britain will be back in front because we'll have up to four plants built. What's been stopping them is the funding."

The initial pilot plants could be in a regional cluster, piping greenhouse gases into depleted oil and gas fields in the North Sea between Britain and Germany.

The government said Humber, Teeside, Merseyside and the Firth of Forth in the North and Thames Gateway in the South were all potential regions for CCS clusters.

The new rules follow Britain's adoption on Wednesday of a target to curb greenhouse gas emissions by 34 percent by 2020. A third of Britain's ageing coal plants will close in the next 10 years, adding to the urgency to develop CCS.

The proposed measures drew some support from green groups.

"At last Ed Miliband is demonstrating welcome signs of climate leadership," said John Sauven, Greenpeace executive director.

"But we're not there yet. For every tonne of carbon captured and buried from new coal plants before the 2020s, the government seems happy to see three tonnes released into the atmosphere."

Utilities broadly welcomed the news, but British utility ScottishPower, part of Spain's Iberdrola, argued the tests should apply to existing coal plants, too.

The UK unit of Germany's E.ON said it would still commit to fit CCS to a coal-fired plant in Kingsnorth, if it is approved to build it.

Coal exporters to Britain said there would be less coal consumption in Britain regardless of CCS.

The timescale for any new coal plant is so far into the future that it makes no difference, a South African supplier told Reuters.

(Reporting by Matt Falloon, Nina Chestney and Jacqueline Cowhig; writing by Gerard Wynn; editing by James Jukwey and Sue Thomas)

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