Carbon Capture Readiness And DECC's Proposals On Coal-Fired Power Generation

Author:Ms Clare Haley
Profession:CMS Cameron McKenna LLP
 
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On 23rd April 2009, the Secretary of State for the Department of

Energy and Climate Change ("DECC") presented DECC's

strategy on coal and carbon capture and storage ("CCS")

to the House of Commons. This coincided with the publication of the

Government's response to its 2008 consultation on the EU's

then proposed CCS Directive and specifically the implementation of

provisions of the proposed Directive dealing with carbon capture

readiness ("CCR").

Carbon Capture Readiness

The policy set out in the Government's response will be

relevant for decision making by the Secretary of State in relation

to applications for new power stations in England and Wales under

Section 36 of the Electricity Act ("Section 36").

Although the responsibility for taking Section 36 decisions in

Scotland has been devolved to the Scottish Ministers, the

Government intends that the policy set out in the response should

be a material consideration in decision making by the Scottish

Ministers too. It is expected that Northern Ireland will be

consulting on CCR in due course.

The CCS Directive was approved on 17th December 2008 and finally

adopted on 6th April 2009. Article 33 of the CCS Directive

addresses CCR and requires applicants for new combustion power

stations to carry out an assessment of whether suitable storage is

available as well as technical and economical assessments of

transport and retrofitting CCS technology. Only if these

assessments show that CCS is ultimately feasible does the CCS

Directive require appropriate space to be set aside to accommodate

carbon capture technology.

Summarising the Government's response to the CCS

consultation, DECC has announced:

CCR will be mandatory for all types of new combustion

power stations (including coal, CHP and biomass) with a rated

electrical output at or over 300MW in England and Wales from April

2009. All such new combustion power stations will have to

demonstrate that they have been designed with operational CCS in

mind and that carbon capture technologies can be installed once the

technologies have been proven. This will apply to all new

applications for such combustion power stations as well as those

applications currently being considered.

The Environment Agency will play a leading role in

assessing whether CCS has been technically and economically

proven.

The Government's response sets out in some detail what CCR

will mean for such new combustion power stations. The

Government's policy goes further than the requirements of the

CCS Directive in that it places a mandatory requirement on all new

combustion power stations with the required rated electrical output

to have and maintain appropriate space set aside for carbon capture

technology. This is to avoid the likelihood of a power station not

being able to find space to retrofit carbon capture technology and

to avoid the power station in time becoming a stranded asset. What

is an "appropriate" amount of space will be site specific

and will...

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