I was so busy listening to you, Mr. Amess, I did not understand that this meant that I should now speak. I am enjoying this dialogue so I am looking forward to other people having the opportunity to speak.
Clause 20 allows the Secretary of State to make regulations prescribing the terms and conditions that must be included in licences. It is necessary to have this power to make regulations prescribing the contents of licences for several reasons. For example, it will allow the Secretary of State to specify the minimum provisions that must be included in every licence, and whether they are to be issued by the Secretary of State himself or herself or another authority to which the licensing function has been transferred under clause 33, as we discussed previously, thus ensuring that the key standards and conditions are contained in all licences. Moreover, this power will allow specific provisions prescribed by EU legislation or international guidance to be incorporated in all licences.
I would like to address my remarks to new clause 7, which is a very simple one. It says that where there is a competitive process related to carbon capture, the Secretary of State’s approach should be technology-neutral. That is what we are driving at. I anticipate that the Minister will accept our amendment because of something he said earlier this morning. When he was talking about alternative strategies for carbon reduction, he said that choice of technology is a matter for companies to determine. I wrote it down as quickly as I could and the record will bear me out, but perhaps the Minister will correct me if am misquoting him. He said that in the context of the energy mix and the best strategy for reducing CO2 and I agree with him.
That is consistent with our new clause, which says that there are three main approaches to carbon capture and storage. The hon. Member for Bolton, South-East ran through this so I will not go over it again at any length, but we have talked quite a lot about post-combustion technology and pre-combustion technology, and rather less interestingly—I would be interested to hear the Minister’s view on this—about oxyfuel combustion, in which the fuel is burnt in oxygen rather than air.
It seems to us that there are three possible technologies that could have been a source of competition and a range of approaches that the Government could have taken. One is that they could have said, “Our goal is reducing CO2 emissions through some method of carbon capture. We will therefore invite submissions from anybody who can do this by any means. We will evaluate them against each other—both within technologies and between technologies—and the one that seems to give us the most bang for our buck is the one we will go for”.
Therefore, there is a one-competition approach. The Minister, in his gently mocking manner, suggested that we were calling for four or five competitions. There is a one-competition answer to this, which is simply that, if public money is to be spent and the Government feel that they do not have the money for more than one technology, at the very least different technologies will be allowed to compete against one another—and may the best carbon capturer win.
That would have been one way. Another way, as we suggested at the previous sitting of the Committee, would have been to have had separate competitions for the different technologies. If the Minister’s argument, as I understand it, is that, like oranges and apples, they cannot be compared, then perhaps there could have been separate competitions. We have suggested that what Ofgem regards as the windfall profits of the energy companies might have been a source of revenue to fund additional competitions. We are not prescriptive about it but, given the importance of the matter, it might have been a better way of doing things.
The Minister has said that this is potentially one of 12 EU-wide demonstration projects. To be fair to him, the Government deserve some credit for trying to take the process forward. I hope that he will update the Committee on where he thinks the other 11 are up to. The Minister shrugs his shoulders worryingly.
It is hard enough being a Minister of State in the UK without being responsible for all the other nations.
There is a serious reason that I ask the question. Are the Government confident, first, that those other schemes are going to come forward at all, and secondly, that they will cover the diverse range of technologies? With the Government having decided to be technology-specific—which we are not happy about—the purpose of our new clause is to make sure that the other technologies are tested in the other demonstration projects.
I hope that the Minister is doing more than just shrugging his shoulders. I hope that when he talks in his fluent Polish, or whatever, to his European counterparts, he is saying to them, “How about getting on with your projects and how about these other technologies being looked at?” The Government have locked the UK in for one demonstration project on one technology, but are they using their influence, such as it is, with our EU partners, to ensure that in the 12 we are at least trying to ameliorate the problem we have created for ourselves by ensuring that other demonstration projects test other technologies?
I am slightly worried that the hon. Gentleman’s new clause will have the perverse effect, which I do not think that he intends, whereby the Government will be required to give equal weighting to different technologies. Therefore, even if the UK becomes expert in one particular technology and other countries become experts in a different technology, we would not be allowed to favour those technologies that the UK has become expert in.
I understand the hon. Gentleman’s point, but it is not true of the new clause, because it refers to competitive processes initiated by the Secretary of State—now and at the start of the process when expertise is in short supply. If, at a later stage, we get very good at a particular technology, nothing in the new clause would prevent the UK Government from favouring it, because the Government’s approach to such technologies would not necessarily involve a competitive process. The new clause relates to the competitive process now being initiated in this country.
Were the new clause to have the interpretation that the hon. Gentleman has suggested, it would need some sort of sunset clause whereby the Government would only have to be even-handed about such matters up to a certain point. After that point, the Government would not have to be even-handed. As it stands, they would be required to be even-handed for ever.
Were the Minister to say that he accepts the principle, but it must end at some point, I could live with that. I am not too worried about the principle applying for ever. The new clause does not bind any non-competitive process—it refers only to competitions, and its title is “Carbon capture competitions”. In my judgment, it does not cover the much wider range of issues such as future Government incentives for carbon capture, but if the only problem with the new clause is that it needs a sunset clause, I am happy to accept that further amendment.
The worry is the impact that the Government’s decision to favour one technology has had on the technology that is out there. Time scales are terribly important, as the Minister would accept. My understanding is that the EU 12 projects have to be in place and with results by 2015—I believe that that is the date that has been given. But the DBERR website says that the competition that it has set up requires something to be in place by 2014. I looked at the website this morning and I think that that is right, but it would be helpful if the Minister could clarify why that is the case.
We have to refer to the expert evidence that we were given from the director of the Carbon Capture and Storage Association at the start of our process. We might say, “He would say this, wouldn’t he,” but he is pretty knowledgeable about the subject. He referred to four pre-combustion products and, at column 100, said that they were all
“on a go-slow now.”——[Official Report, Energy Public Bill Committee, 19 February 2008; c. 100.]
Does the Minister accept that the consequence of his decision to be technology-specific has been to undermine several other projects that are actually up and running, because that is clearly the view of the industry?
The witness, Dr. Chapman, said to us that pre-combustion technology is very important. I think that the hon. Member for Bolton, South-East reminded us that we talk about the hydrogen economy—we have all used that expression in speeches about the dim and distant future—but here and now we have a by-product of pre-combustion technology that is a source of hydrogen, which could help to fuel the hydrogen economy. If not through that route, how does the Minister envisage the hydrogen economy getting going?
Dr. Chapman said
“This— pre-combustion technology— will be the most efficient way to make hydrogen in the future, and with carbon capture and storage, there will be clean energy using hydrogen as a vector. That is very important for pre-combustion technology; it is a very important place, and we in the UK need to be there.”——[Official Report, Energy Public Bill Committee, 19 February 2008; c. 100.]
But his view is that the selection of a technology has potentially undermined something very important.
When we discussed this previously, I spoke, as I will when I contribute to the debate later today, about the application of post-combustion technology to the situation in China. I have raised that issue with the Committee and the hon. Member for Northavon before. Has he factored into his analysis the pros and cons of pre and post-combustion when it comes to the real challenge of coal-fired power stations and the consequently huge emissions in China?
The Minister makes a perfectly fair point—I have been perfectly happy to accept that on the record in the past—but he was happy to admit to the Committee that we are talking about the expenditure of hundreds of millions of pounds of taxpayers’ money. My question to him is, where is the cost-benefit analysis of the different sorts of carbon capture technology that has led the Government to pick one? They have made a big decision, which will have implications for years to come, on the technology used for carbon capture.
The Minister implies that the Government have—and I hope that they have—weighed up the pros and cons of the different technologies. Will he place in the Library a copy of the document in which they did that? Have they looked at all three? Have they looked at how long it might take? Have they tried to put some sort of value on the potential for retrofitting Chinese coal-fired power stations, as against the potential of a hydrogen economy if we have pre-combustion technology? Surely, if the Government have taken a decision to favour one over another, it has been based on a coherent, rational, structured cost-benefit analysis, which the Minister will place in the Library at our request. I certainly hope so.
The analysis that the Science and Technology Committee were aware of and which the Government responded to on 27 April 2006 is the so-called MARKAL modelling analysis. As far as I am aware, unless there is some more recent data or analysis, that is what the Government based the choice of post versus pre-carbon capture technology on. However, as the Government said in their answer to the Science and Technology Committee’s report:
“Subsequently some generators have indicated that the cost balance between refurbishment and new build is closer than implied by the MARKAL analysis, which did not take account of lost revenue during the refurbishment shutdown and space limitations at some sites.”
That means that on some generator sites there is not room to build a pre-capture plant or to fit retrospectively post-carbon capture technology. Space limitation is one issue, but the other is that to fit retrospective post-carbon capture technology, the plant has to be shut down for a considerable period. I ask the Minister, why was that not included in the MARKAL analysis? It would probably have altered the balance between pre and post-capture technology.
I am grateful for that well-informed intervention. That is the kind of analysis that I hope that the Minister will place in the Library: the analysis that the Department has done for all three technologies, taking into account not just the range of costs and benefits, which might be of a more commercial nature, as the hon. Gentleman suggests, but wider matters. As an economist, I struggle to think how one can put a cash value on the benefit of facilitating the hydrogen economy, but that appears to be a potential benefit of one of the technologies. Have the Government done that? My sense is that they have not. They have had a think about it, they have looked at some of the papers, which the hon. Gentleman gave, and they have taken a punt on one technology. The Minister is shaking his head. It would be nice to think that there is a comprehensive, rigorous and thorough analysis of the costs and benefits of the three technologies and that he will publish that analysis so that we can look at it.
Let me press the hon. Gentleman on this point. This is an extremely complex field. I think that he was conceding that although it is an interesting and intellectually stimulating debating point to say, “Here is a technology that can produce a hydrogen economy. Here is another one. Let’s do a cost-benefit analysis, ” that could not, I suspect, be done in great detail. In any case, one would want to factor into the analysis that others are developing hydrogen technologies; there is a lot of interest in that in the United States. With respect, he is dodging my point about China. We know the rate at which the Chinese are building coal-fired power stations to fuel their economy. I am advised that it is post-combustion technology that could be retrofitted there. Given the huge carbon emissions from China in the future, is he really quarrelling with the advice that I have received that, as we had to choose one technology, post-combustion was the best?
I am querying the Minister’s premise that we had to choose one technology—that we had to pre-select. That is the fundamental point. It may be that a competitive process with a proper evaluation of what the Minister calls the pros and cons would have resulted, if there was to be a single project, in a post-combustion project. That may have been the outcome, but pre-empting the outcome in the way that the Minister has seems to be the problem. He implies that the Government could not do a cost-benefit analysis, so I am trying to work out what they did do. Has he weighed up the costs from the go-slow on the four pre-combustion projects, which he has undermined by picking a different technology? Surely, just as I should take account of the potential benefits of retrofitting Chinese coal-fired power stations, the Minister should take account of the costs of undermining commercial projects to develop alternative technology. That has been the impact of his decision.
Our argument is that if we are to have one competition, the Government should not pre-empt its outcome by picking a technology. The Minister was right when he said to the Committee this morning that the technology was a matter for the companies not for the Government; the Government should set the framework, enable the competing technologies to compete and show which is the best across the board. My concern is that by picking a winner, as it were, the Government have undermined other valuable technologies that could have been well worth looking at.
This has been a very interesting and useful exchange so far. I agree with the hon. Gentleman’s analysis of the Government’s pilot project and the fact that the Government have made a mistake in the way that they have gone about it. However, I do not believe that his new clause is the right solution, because to go down the route of stopping the Minister deciding on the right type of technology in future competitions is too prescriptive.
The hon. Member for South Thanet put his finger on the key issue. The perverse consequence of this new clause would actually make it more difficult for us to encourage areas where the technologies might best be explored further. If we make good progress with the post-combustion project that the Government are supporting and then in a few years the Government decide to launch another project to see whether they could bring pre-combustion technology up to the same status, this new clause would make that illegal. It would mean that they could not say “We now want to do a pre-combustion project”, because this new clause says that equal status should now be given to all carbon-capture technologies. It would end up being counter-productive and we would need a new Act of Parliament to allow the Government to put in place a competition for one type of technology.
The Minister asked last week if the Liberal Democrats wanted two, three, four, five different projects to run at the same time. With respect, he asked the wrong question—that was always Ted Heath’s response on “Newsnight” when he was asked a question he did not like. He would say “With respect, Mr. Paxman, you are asking me the wrong question” and he would answer the question he would have liked to have been asked. The Minister has asked the wrong question because rather than going alone on this issue, this should have been a genuinely international exercise. The UK should be part of an international consortium trying to develop post-combustion carbon capture and storage and also be part of an international consortium trying to develop pre-combustion carbon capture and storage. We would then find that there would be reduced costs for us as part of that process and we could genuinely compare the benefits that could be derived from different technologies.
It goes back to what the chairman of Shell was saying about going for a “blueprint approach” to this rather than a “scramble approach”. It is a matter for concern that the Minister does not actually know what the other 11 projects in Europe are going to be about. He would not necessarily need a detailed understanding of all 11, but even if he knew what two or three of them were, it would be helpful. We should be looking to co-operate on these issues, rather than Britain trying to go it alone because we want to secure an international lead in these areas.
The earlier shrug of my shoulders—I do not know how a shrug is recorded in Hansard—was because I really wish there were 11 other projects I could detail to the Committee. We are ahead on this and, at one level, I am proud of that but, at another level, I am frustrated because we need to bring the European target of 12 into the real world. It will be our endeavour in the European Union to encourage that. I am unable, I fear, to detail even three or four because, as far as I know, the details of three or four are not actually there. We are, sadly, very far ahead, together with our colleagues in Norway who, while being close partners, are not actually members of the European Union. That is the reality.
I am grateful to the Minister, but I think this is an issue, above almost any of the others we have discussed, where international co-operation would have been sensible. We should have been looking at the technologies being developed in different parts of the world and we should have been co-operating on a post-combustion project in one area and a pre-combustion project somewhere else so that we could genuinely evaluate them.
The Minister asked on two interventions about the situation in China. To go to China and be able to say “We have mastered pre-combustion technology so please, in future, with your coal-fired power stations every week, look at doing it on a pre-combustion basis rather than a post-combustion basis” would have been a fantastic opportunity. So on both sides of this technology, there were major international opportunities for Britain in terms of trade and there were major opportunities for British science and British genius. We have narrowed things down in a way that is regrettable. My concern about the new clause is that, when we want to reconsider the issue and to have a project whereby pre-combustion could be made to work more effectively and be mastered, it would rule it out.
The new clause has real relevance to my constituents and those who work in the coal industry at Welbeck and Thorsby collieries in Nottinghamshire. Those miners are the most efficient in Europe and have reduced costs. Burning coal is important economically as is getting the cost right to enter the market. It is important to burn coal in an environmentally sensitive way, which is what the new clause covers.
I understand that generators in the United Kingdom wish to replace some coal-fired power stations with new coal-fired power stations. When I last looked at matters, there were about a dozen propositions for new coal-fired power stations. To meet our environmental concerns and worries about carbon, those new coal plants must be more efficient and effective than they are at present. That is the substance of the new clause and our debate about carbon capture and storage, and the technologies that we need to introduce.
The matter is important nationally as well as internationally. As the Committee has recognised, in terms of the environment, it does not matter where a tonne of carbon is produced because it is still the same pollutant wherever it is. If we can therefore influence new design and new build in China and India, that will be important and significant.
The hon. Member for Northavon made a number of points, such as that clean coal demonstration plant post-combustion will clearly not be sufficient. The EU aspires to a dozen such plants and it makes sense, as the hon. Member for Wealden has just said, to have a real and meaningful discussion within the EU. I accept that the Government are in the lead, but there needs to be a realistic, rational discussion about using the 12 projects throughout the EU to develop other forms of clean coal technology—pre-combustion or post-combustion.
A lot of discussion has taken place about China. The Minister will know more about such matters than I do, but I remind the Committee that a new coal power station is being built in China at the moment with financial support from the EU. We are involved in the partnership to which the hon. Member for Wealden referred, and we need to do more of that because, if it is right that carbon capture and storage is a real new technology for the future, we must demonstrate it and bring forward the right sort of technology.
I am sceptical about carbon capture and storage; it has not been done yet. We can do it in the laboratory and we can do small-scale plants, but building a plant and making the science work is a big leap. I am not confident that we can do that in the time frame that is talked about, so it is important that we investigate as many technologies as possible.
Generators know that they must replace plant and generators know of the opportunities overseas. It is recognised that they are big international companies, such as RWE, E.ON and EDF Energy. None of them is British-based; they are European companies that operate internationally. They are not scot-free in respect of such issues. They recognise that coal has a place in the future, so they must invest, too. There is a rose-glassed view from the generators that the Government will take the total cost of clean coal technology, and carbon capture and storage. If the generators have an eye to the future, they should use their own profits, balance sheets and ability to borrow to go forward and be active partners. I should like to see the plea accepted that there be more than one demonstration plant in the UK. However, let us be realistic—that will not happen.
Companies such as Centrica, which last week announced enormous profits, must know that to invest in the future and to survive, they, too, have to invest in the new technologies, such as carbon capture and storage and clean coal technologies. It is not just a matter for the Government, but a challenge for us all. We need to set up partnership arrangements in the UK and internationally to ensure that that happens.
I will try to be brief. I do not envy the Minister or his advisers in setting up competition in this area because of the difficulties involved. First, there is pre-combustion or post-combustion capture of carbon dioxide. Secondly, there are gas and coal-fired power stations and possibly also oil, although that is unlikely. Thirdly, there is the difficulty of transporting the carbon dioxide after its capture.
Obviously, transporting carbon dioxide to the Scottish coast from the east or west midlands where some of the generators are will be far more costly than what BP was proposing, which was to build a gas-fired plant at Peterhead pretty much adjacent to the oil wells down which the carbon dioxide would be pumped. I have mentioned that one difficulty with the MARKAL analysis for post-combustion capture of carbon dioxide was that it did not appear to take into account the downtime of the plant while the retrofitting took place. I doubt that it has, but I wonder whether the MARKAL analysis has taken into consideration the length of transportation for the carbon dioxide from the point of capture to the oil wells off the Scottish coast. That will complicate the cost analysis extremely.
I wonder whether the transport of carbon dioxide is possible at the moment without putting new infrastructure in place. When we did the analysis, the assumption was that some of the gas lines that transport gas from the sea would become available because of the running down of gas provision from the North sea field and that those could be converted to transport carbon dioxide up the country to the very wells from which gas had been coming down the country to the consumers—whether they were generators or domestic consumers.
This is a terribly complex business and I do not envy the civil servants or their advisers in reaching a conclusion. In conclusion, I ask the Minister how many of those difficulties have been taken into account while he has been led to the judgment between post-combustion and pre-combustion carbon capture.
Again, this has been a very useful debate. I listened with great interest to my hon. Friend the Member for Bolton, South-East and I am grateful to my hon. Friend the Member for Sherwood for giving us a timely reality check on where we are in terms of this technology. I mentioned on another occasion that although there is some excitement about the bidding process and whether we should build two, three or four and whether they should be pre-combustion or post-combustion, those discussions are often not very financially literate. My hon. Friend the Member for Sherwood has given us the reality check that the whole chemistry set, as I think of it, has not yet been tried. Our demonstration project will be one of the first.
I will try to deal with many of the points that have been raised but, first, I remind the Committee that the Bill provides an enabling framework that will allow the safe storage of carbon dioxide offshore, paving the way for the wider deployment of carbon capture technologies. As such, it does not make provision for Government competitions or for CO2 storage demonstrations and it does not regulate the types of technologies that may be deployed via such competitions or the activity of carbon capture at all, as opposed to the activity of storage. In other words, the provisions in the Bill are technology-neutral for offshore carbon dioxide storage and for carbon dioxide capture. I hope that that gives comfort to those who are in favour of one technology rather than another.
I sometimes think that in a parallel world there might be a Government who have chosen pre-combustion storage, and I can now see the hon. Member for Northavon in that parallel world arguing passionately about the importance of post-combustion and how outrageous it is that the Government have ignored the realities in China—I jest, but only in part.
The Government already support a range of carbon capture technologies through a variety of means, including a £35 million fund to encourage industry-led demonstrations of elements that contribute towards carbon abatement technologies, including CCS; almost £9 million for various research projects supported by the Research Councils and the Technology Strategy Board; and pushing for the EU ETS to take account of CCS. The newly formed Energy Technologies Institute considers CCS as one of its possible future technology themes. With a potential £1 billion budget over 10 years, it is bringing together Government and some of the world’s biggest companies, with a view to accelerating the development of low-carbon energy technologies towards commercial deployment.
All those initiatives give equal status to all carbon capture technologies, exactly as the hon. Member for Northavon and perhaps other hon. Members have specified. I hope that he and the hon. Member for Cheltenham accept that the Government see CCS as a priority and are showing global leadership in facilitating its demonstration and deployment.
The only area in which the Government have made a deliberate choice regarding a capture technology relates to our competition for a demonstration project, and there are powerful reasons for having done so. The potential contribution that CCS technologies can make to tackling global climate change is significant. The Stern review estimates that CCS would contribute up to 28 per cent. of the global CO2 reductions that are needed by 2050 if the aim of restricting temperature increases to 2° C is to be achieved. We must remain focused on CCS as a global solution to climate change. For CCS to be deployed on such a scale, the technology first needs to be demonstrated on a commercial scale. That is why the Government are supporting one of the world’s first projects demonstrating the full chain of CCS technology in relation to a commercial-scale power station.
We considered carefully whether it was possible to run a competition that was open to all technologies, but we concluded that to run a fair and transparent competition, it was necessary to decide on the capture technology at the outset. It would be difficult to develop evaluation criteria that could fairly assess the different technologies against each other—each has different benefits. Our decision to focus on post-combustion capture technology in relation to a coal-fired power station will allow us to achieve the key objective of our demonstration project, which is to demonstrate a technology that is relevant and transferable to global markets. We need to ensure that actions taken in the UK can also help other countries to take steps towards tackling their emissions.
The arguments for examining CCS in relation to a coal plant are clear. Coal will remain a significant part of the world’s energy mix over the next decades. The recently published “World Energy Outlook 2007” projects that demand for coal will increase by more than 70 per cent. over the period from 2005 to 2030. China and India alone already account for more than 45 per cent. of world coal use and are projected to drive more than 80 per cent. of that increase in demand. In 2006, China built one coal-fired 1 GW power station every four days, which is equivalent to two new Drax 4 GW power stations every month.
The new build coal-fired power stations in China alone could emit about 260 megatonnes of CO2 each year, although that will depend on the type of power station being built and the rate of build. That is staggering when compared with total UK CO2 emissions in 2006, which were about 150 megatonnes. The ability for post-combustion technology to be retrofitted to existing power stations enables us to tackle such carbon dioxide emissions that would otherwise be locked in right now through existing and planned new build power stations.
It is important to recognise that pre-combustion technologies are used in conjunction with integrated gasification combined cycle power stations—IGCC power stations. These are not yet widely deployed, nor are they expected to be deployed for many years to come. For example, the “World Energy Outlook 2006” report says that between 2015 and 2030, IGCC will account for less than 20 per cent. of new capacity to be added globally. That is why early demonstration of post-combustion capture, which can be readily retrofitted, is so important for tackling global carbon dioxide emissions. Although I do not pretend to be an expert, I understand that it is far more difficult to retrofit pre-combustion.
I am confident that we have made the right decision in focusing the competition on post-combustion, and stand wholeheartedly behind our decision. The focus on post-combustion, however, is purely in the context of the competition. We recognise that all CCS technologies have a potentially significant role to play in helping to tackle climate change. That includes the use of pre-combustion capture technologies, which, as the hon. Member for Northavon said, could have an important role to play in producing hydrogen for emission-free transport.
In addition to the measures I outlined at the start, we are exploring a range of options aimed at promoting widespread deployment of all CCS technologies and hope, as I have said on a number of occasions, that UK companies will show the same enthusiasm and leadership in this area as has been shown by the Government to date. I noted the comments of my hon. Friend the Member for Sherwood on that issue of corporate and environmental responsibility.
The Government have been criticised for supporting only one commercial-scale demonstration project. Yet sponsoring one project alone represents a significant investment of potentially several hundreds of millions of pounds of public support, and a scale of commitment that only two other countries in the world have made. To say that the Government should be supporting two or three demonstrations is simply not realistic. We are doing more than just about any country in the world in this area, and we should be proud of that, not critical.
The UK truly is a global leader in this technology, but one country cannot tackle the challenges involved in making CCS commercially deployable. That is why, as I mentioned in the last sitting, we are working closely with other countries such as the US and Norway—I was asked by the hon. Member for Wealden about this—and through multilateral institutions to encourage others to make similar commitments. Indeed, I was discussing this with my Norwegian opposite number only a couple of weeks ago. It is only by doing so that we can help bring about widespread deployment within the time scales required to tackle global climate change.
I am now clear that this is coal only, and that it will be on an existing power station, but I am still not clear about what the competition will be based on. Will it be a cost analysis of the different projects, and will it include or exclude the transportation of the carbon dioxide?
It will include the whole project: the stripping out, in layman’s terms, of the CO2 , the transportation and the storage. It will have to include everything and, indeed, frustrating though it is, we anticipate that it might take a year or so for us to do the technical assessments required on the different projects coming forward to us. We will be doing a full appraisal.
Faced with those who say that the Government have made slow progress in our approach to CCS, I would say that the case is quite the contrary: The decision to launch a demonstration project was taken in May 2007. The competition to select a project was launched in November 2007, as we promised. We expect our demonstration to be operational by 2014. Only two other countries—Norway and the US—are currently committed to funding similar scale projects, both of which are likely to be operational within the same time frame. Rather than dragging our feet, we are actually sprinting ahead and leading the way.
Our competition for a post-combustion commercial scale demonstration project is already under way in line with our commitment, and would not be affected by the new clause. The new clause would have the perhaps unintended consequence of precluding any future competition that could be focused on pre-combustion technology, if it was determined to be necessary, given that the Government would have already supported the demonstration of post-combustion. Given what Opposition Members have said about pre-combustion, that would surely not be the intention of the hon. Member for Northavon.
In summary, while I have discussed issues that—
I know, but it is quite a long summary. I am happy to give way to the hon. Gentleman, but he will look at the clock as much as I do.
The one specific thing that I do not understand about the competition, which is important in the context that we are discussing, is if one company wins and it learns everything that there is to know or a great deal that is of commercial value to it, is there any onus on it to share that with everybody else, or is it private knowledge? How does that process work? A competition with one winner does not, potentially, disseminate the technology. How do we ensure that the winner plays fair with everybody else?
That is a good point, and I do not have a crisp answer, except to say that we clearly need to balance concerns about intellectual property rights against the more important concern of knowledge transfer. Given all that I have said about China, knowledge transfer is the crucial thing here.
I will not be able to address the comments of one or two colleagues now, but I may find another opportunity of doing so. I understand hon. Members’ frustrations about where we are, but let us remember that, as my hon. Friend the Member for Sherwood said, this is brand new technology; not tried, not tested. We are ahead of the game. The Bill provides a regulatory framework that will enable the different technologies to come to fruition, but I make no apology for the fact that, in the demonstration project, for a number of different reasons, we felt that we should choose one technology. That was fair to some of the different companies that were coming forward, because developing proposals for competition is itself quite expensive. With that, and looking at the clock, I urge the Committee to support the clause.
A lot of what the Minister had to say was explaining the case for the winner of the competition being post-combustion technology. My point was not that there was not a strong case for that, but that it is wrong to pre-empt it, so I am not sure that he addressed my point.
I asked the Minister to comment on the third technology, oxyfuel technology, which he did not mention at all. I asked him to comment on the go-slow on existing pre-combustion technologies, which he did not mention at all. He said that it was difficult to assess the relative merits of different technologies on a transparent basis, so the Government have done it on a non-transparent basis, by simply picking one behind closed doors. It seems that that must be inferior to inviting competing technologies, but I take the general observation that the new clause, without a sunset clause, might have undesirable effects. When the relevant time comes, I will not press the new clause.