THE government yesterday gave the go-ahead for a new generation of coal-fired power stations which will see a proportion of their carbon dioxide emissions buried underground – much of it likely to be beneath the North Sea.
Energy and Climate Change Secretary Ed Miliband announced a plan to build four power stations using the as-yet unproven carbon capture or clean coal technology.
The cost of carbon capture will see consumers having to pay a new levy of 2 per cent on their gas bills, averaging at about £8 per year for each household.
And it has also emerged that the North Sea seems likely to become one of the biggest dumps for in the world.
The government plan predicts "a new future for the North Sea industry, capitalising on the UK's abundance of offshore storage sites for ".
The Scotsman also understands that the Scottish Government and Edinburgh University will shortly make an announcement on their plans to transform the seabed of porous rock into one of the world's largest dumps, using a network of pipes already in place for the oil and gas industry.
An industry source said: "We are expecting an announcement from the Scottish Government and Edinburgh University, regarding work they've done on this, next week."
It is likely that Longannet power station, in Fife, will be one of the first to test the new technology on an industrial scale.
Following Mr Miliband's announcement that there will now be four "test" power stations, instead of just one, Longannet's owner ScottishPower said it could start by 2014, faster than its rivals.
Longannet was also yesterday endorsed as the best place to start the tests by the environment campaigners WWF.
The move by the government is part of efforts to corner the technology for carbon capture in the world market, but also an effort to offset a potential crisis with one-third of UK power stations under threat of closure for breaking new EU rules which are set to come in shortly.
It follows the announcement in the Budget that the government is setting mandatory reduction targets of 34 per cent to 2020 relative to 1994's level.
The success of carbon capture is vital for Scotland's energy future, with the Scottish Government already blocking any new nuclear power stations and claiming carbon capture can provide the environmentally friendly base-supply to back up energy produced from renewables, such as wind and the sea.
The technology will come at a small cost of 2 per cent on household bills, which will mean suppliers using clean coal technology can ask more for their production and the cost will be spread across the whole network.
There will be £90 million from the government to pay for upfront studies and 180 million (£160 million) from the European Union for the first project to get the go-ahead.
Mr Miliband's announcement also means that no more traditional coal power stations will be built in Britain and only ones with clean coal technology will be permitted.
"The future of coal in our energy mix poses the starkest dilemma we face: it is a polluting fuel, but is used across the world because it is cheap and it is flexible enough to meet fluctuations in demand for power," Mr Miliband said.
"In order to ensure that we maintain a diverse energy mix, we need new coal-fired power stations, but only if they can be part of a low-carbon future."
He told MPs that the technology could reduce emissions from fossil fuels by up to 90 per cent, but there had to be a global effort to develop this technology and the UK was in a strong position to lead this charge.
The Scotsman understands that ScottishPower has been given positive soundings from the UK government about the Longannet project.
The company believes that, if the go-ahead can be given to start in 2014, it could develop technology that would be sold around the world and built next to all 50,000 fossil-fuel power stations globally.
Although the technology is officially unproven, it has been shown to work at laboratory and in medium-scale tests, so ScottishPower is confident that it can perform on a large, industrial scale.
ScottishPower chief executive Nick Horler said: "In such difficult economic times, we welcome the government's renewed and additional commitment to demonstrating carbon capture and storage.
"This recognises the tremendous opportunity the UK has to lead the world with this technology and create new skills, jobs and opportunities for growth in the low-carbon sector.
"Continued momentum on the demonstration project and investment in a skills base is essential for the UK to take a real advantage in this emerging market and continue to lead the world in emission reductions."
He added that ScottishPower's parent company, Iberdrola – already a world leader in wind power – had committed to make the UK its global centre of excellence for carbon capture development.
ScottishPower's biggest rival is E.ON's proposal for a cluster of power stations based around Kingsnorth in Essex.
Yesterday, it put out the results of a study which showed it could save 28 billion tonnes of a year.
However, ScottishPower believes its project can be ready more quickly, because E.ON's bid needs a new power station.
In addition, the increase from one to four industrial-sized tests allows both options to go forward at their own pace.
The announcement yesterday was welcomed by environmental groups, with the WWF coming out in favour of Longannet to get the nod first.
Dr Sam Gardner, the policy officer at WWF Scotland, said: "Scotland has the potential to lead the development of carbon capture storage technology, with the proposals for CCS retrofit at Longannet, the potential for retrofit at Peterhead and the access to significant carbon storage reservoirs in the North Sea oil and gas fields."
Greenpeace executive director John Sauven added: "At last, Ed Miliband is demonstrating welcome signs of climate leadership in the face of resistance from Whitehall officials and Cabinet colleagues.
"He is the first minister in 12 years to throw down the gauntlet to the energy companies and demand that they start taking climate change seriously."
However, political opponents were less than convinced about Mr Miliband's announcement yesterday. Despite his assurances of no new "dirty" coal power stations, the Liberal Democrats claimed that the minister had failed properly to rule them out.
Martin Horwood, Lib Dem environment spokesman, said: "Ed Miliband has left the door wide open for more old-fashioned, dirty, coal power stations, with no guarantee they will ever be cleaned up.
"He may have his fingers crossed that CCS technology will work before it's too late, but it's a gamble that could lead to a climate change catastrophe."
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GRAPHIC: HOW CARBON CAPTURE WORKS
LOST CHANCETHERE are high hopes in Scotland the government announcement yesterday will come as compensation for disappointment in 2007.
Then a cutting edge carbon capture project based in Peterhead led by BP and Scottish and Southern Electricity was wound up after just two years because of UK government dithering over whether or not it would qualify for the subsidy it needed to continue. The project is now being tested in Abu Dhabi.
The project, which aimed to isolate the produced by a natural gas-fired generator plant and pump into the empty Miller field under the North Sea, had been pushed by Alex Salmond before he became First Minister.
Its failure was held up as an example of why Scotland should have more control of its energy policy. In the end it failed to meet government criteria because it did not involve clean coal.
Now it is hoped that Longannet can lead the way in carbon capture and the North Sea will become one of the world's biggest storage areas.
SNP Westminster energy spokesman Mike Weir said: "This announcement is clearly better late than never. Scotland could already have been at the forefront of carbon capture and storage if UK Ministers had not pulled the rug from under the Peterhead project."
He added that Scotland has some of Europe's largest carbon storage reserves in our North Sea oil and gas fields combined with the expertise on how to access them.
How it works and how much it will cost you
What is carbon capture and storage?A: Carbon capture and storage (CCS) catches , which poses a threat to the climate, and stores it permanently underground, for example in old gasfields, cutting output from a power station by up to 90 per cent.
How does it work? There are several ways of capturing the carbon, and of storing it. Post-combustion capture takes the out after the fuel has been burnt, using chemicals which separate it out of the flue gas.
Another method converts the fuel into and hydrogen. This could be used to produce hydrogen for running cars.
There is also oxyfuel combustion, which can also be retrofitted and involves burning the fuel in pure oxygen to create water and , which can then be captured easily.
And does it work?Pilot projects have demonstrated its use on a small-scale – up to 30MW, compared to the 300MW net output proposed today – while most of the major components of CCS are already in use in other processes.
Are there any other problems? The main concern is cost. Yesterday Energy Secretary Ed Miliband acknowledged that funding to the tune of "billions of pounds" would be needed over a long period. A trial plant could cost between £750 million and £1.5 billion – on top of the cost of the new power plant.
How will it be paid for? The government plans to set up a funding mechanism for the four trial projects. The cost is expected to add around 2 per cent to the average household bill by 2020.
Price of carbon capture is worth paying in quest to reduce emissions
Analysis: Stuart HaszeldineTHIS is a very welcome announcement by the UK government and not before time. It is what many of us have been asking the government to do for the last four or five years and provides a balanced and realistic strategy to transform energy production in the UK.
It is absolutely essential if we are to reduce our carbon emissions in the future and could be highly profitable for Scotland and the UK as a whole, turning us into world leaders.
There are energy companies all around the UK waiting to try to set up carbon capture projects, but the main problem has always been cost.
Now that the government has agreed to go for a feeder levy – which allows energy suppliers to charge more for the power and spread that cost around the whole network – we seem to have a way forward to start paying for it. It is hoped that once the technology is up and running then costs will be greatly reduced.
One important aspect about this announcement is that it will allow the UK government to test several methods, which will allow them to find out which is better at storing and the most cost effective.
There is the post-combustion method of separating after the fuel has been burned, which was the original UK government competition."
But there are other methods which can now be looked at such as pre-combustion which converts the fuel into and hydrogen before it is burnt, and has the advantage of providing supplies of hydrogen as fuel.
Then there is oxy-fuel combustion, which can also be retrofitted and involves burning the fuel in pure oxygen to create water. It will also put Britain in a strong position when it comes to selling this technology around the world.
In terms of the North Sea there is huge potential for carbon storage in the former oil fields and in the aquifer below the surface, which is currently just full of salt water. This certainly means that carbon storage in the North Sea is back on the table and that it will have a very large role to play.
In the future it is hoped 50 per cent of energy will be supplied by renewables, part of the rest will come from nuclear plants in England, but most of it will be provided by carbon capture plants.
The technology has been shown to work at laboratory and middle engineering level, so it is not unproven.
What is needed now is for it to be tested on an industrial scale and then we will be able to see if it can be done with large quantities and cost effectively.
In the end, if we are to maintain power supplies and reduce damaging carbon emissions then this technology is a price worth paying.
• Stuart Haszeldine is Professor of Sedimentary Geology at the School of Geosciences at the Edinburgh University.
