Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

New Clause 1

Part of Energy Bill – in a Public Bill Committee at 10:00 am on 21st January 2010.

Alert me about debates like this

Photo of Joan Ruddock Joan Ruddock Minister of State (Department of Energy and Climate Change) 10:00 am, 21st January 2010

New clauses 1, 2 and 5 seek to address an issue that I think we all agree is critical: the decarbonisation of the UK power sector. Specifically, they seek to introduce an emissions performance standard  to regulate carbon emissions from power stations. If the ultimate goal of the new clauses is to reduce carbon emissions from our fossil fuel power stations by as much, and as quickly, as is feasible, that is an aspiration that we share fully. The Government are absolutely committed to the fight against climate change, through actions both at home and abroad, and I am pleased that that approach has been acknowledged by the Opposition. The Climate Change Act 2008, and the system of five-year carbon budgets, establish a legally binding trajectory towards our UK target to reduce greenhouse gas emissions by at least 80 per cent. by 2050.

The move to a low-carbon electricity system is critical to the delivery of our climate goals and the Government’s low-carbon transition plan, which was published last summer and which sets out our overarching strategy. Our approach considers both how we can use energy more efficiently and how our energy is supplied. Emissions from the power sector are already regulated through the emissions trading system, which is at the heart of our domestic and EU efforts to tackle climate change.

We have worked closely with the European Commission and member states to significantly strengthen the scheme from phase 3—which starts in 2013—onwards. For example, there will now be a centralised EU-wide cap, ensuring a more ambitious, certain and consistent approach across the EU, and in the UK there will be 100 per cent. auctioning of allowances to the power sector, which will ensure that the cost of carbon is better integrated into business decisions. I draw those matters to the Committee’s attention advisedly, because they are at the core of the strategy and we always have to consider any new proposals, such as the emissions performance standard, in that context. We recognise, however, that the EU emissions trading scheme is not sufficient. We must, in parallel, take action to remove barriers to the development and deployment of low-carbon technologies, namely new nuclear, renewables and clean coal.

As we have said consistently, tackling emissions from coal is a priority. Coal is the fuel with the highest carbon emissions, yet countries across the globe are set to use increasing amounts for electricity generation. That is why we are legislating in the Bill for a new CCS incentive to support four demonstration projects. We have already put in place the most environmentally ambitious package of policy measures for clean coal of any country in the world.

We require any new coal power station to demonstrate the full CCS chain—capture, transport and storage—at a commercial scale of around 400 MW of their output; that is a minimum. Requiring that scale of CCS at this stage in the development of the technology is ambitious and goes beyond the scale of most projects planned elsewhere, but we believe that it is feasible. Modelling suggests that the carbon emissions from a demonstration programme of the scale that we are planning would be similar to those from the alternative gas generation that would be displaced.

We will maintain a rolling review of progress as regards CCS technology and, by 2018, will publish a report that considers the case for new regulatory and financial measures to drive the move to clean coal. In our public consultation, a common argument advanced by respondents was that we first need to demonstrate CCS and develop a better understanding of its potential. They were also concerned that the introduction of an  EPS now, while uncertainty remains about CCS, would deter investment in new power stations that would form the basis of demonstration plants. That is clearly a very important consideration.

It is also worth noting that an EPS is not the only option for reducing emissions from coal power stations. In our consultation last year, we included other options: a cap on carbon dioxide emissions from individual coal power stations, allowing coal plants to emit up to a specified amount of CO2 each year, over a number of years; and a running hours limit on coal power stations. We also need to remember that we expect coal power plants to retrofit CCS to their full capacity by 2025, with the CCS incentive able to provide support. Such measures will be looked at as part of the rolling review.