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Coventry based power company E.ON, announced last month that it has requested £1bn in EU funding to develop Carbon Capture and Storage (CCS) at its proposed new coal-fired power units at Kingsnorth in Kent. This is the latest step in the long march towards economic viability for a technology which many hope will soon make the jump to large-scale commercial operation. Coal has many advantages; it is indigenous to the UK, it is cheap, plentiful, flexible and a safe source of power. But it has one major drawback; when burnt it produces prodigious quantities of CO 2. Preventing release into the atmosphere of these large amounts of CO 2 is essential and it is CCS, commonly dubbed ‘clean coal technology‘, that facilitates the capture and storage of the CO 2. There are currently three, commercially viable, methods of CO 2 capture, all of which offer business opportunities for the UK. CCS technology has been around for decades in the industrial sector, but never applied on a full-scale power station. Besides all the technical challenges, fitting CCS to a power station requires large capital expenditure and increased operating costs. It may also reduce the efficiency of the plant and unfortunately, it can be energy intensive. Nonetheless, governments have now recognised the vital part coal plays in the energy mix and the need for a solution to allow its continued use. The US promised $3.4 billion for clean coal development in the US and its European equivalent stimulus package allocates just over 1 billion euros for demonstration projects. The EU has also created a fund of around 6 billion euros to support clean coal projects. The CCS industry worldwide is valued at $100 billion annually. The good news for the UK is that we have huge coal reserves and many of the best CO 2 storage sites in Europe. We also have the necessary skills; notably a strong oil and gas industry, with a wealth of mining, engineering, project and manufacturing expertise - much of it in the Midlands. Industry analysts place the UK second only to the US in the table of countries most attractive to near term CCS investment. Against this background, our government’s U-turn in April’s Budget was particularly welcome, with funding now on offer for an extra three CCS demonstration projects - now with no restriction on technology type - and significantly to include a new levy on consumers. The conflict between energy security and climate change is one of the most important issues of our age - it now looks certain that clean coal will play a large part in resolving this conflict. For further information please contact: Andrew Whitehead, Partner
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