Carbon limits imposed on new coal plants

By Nina Chestney and Gerard Wynn

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.