Tory energy plans '˜incoherent'

Staff at the White Rose Carbon Capture Storage project at the Drax Power Station, near Selby in North Yorkshire, have been handed their notice as top bosses say they are in “transition to closure”.

It was originally hoped the project would create 3,500 jobs and up to £11bn in inward investment to the Yorkshire and Humber economy with cutting edge technology to transport harmful CO2 emissions from the coal-fired power station to a storage facility underground via a pipeline.

After Chancellor George Osborne pulled a £1bn competition to develop the technology during the Autumn Spending Review, energy sector experts have criticised the Government for failing to believe in their own energy policy, scaring off investors and leaving the UK open to rising energy prices.

Chris Littlecott, a national carbon capture expert working for organisation E3G told the House of Commons’ Energy and Climate Change Committee, that the “treatment of the project was shabby”.

He said: “It reflects very badly on the UK Government’s relationship with business and their ability to drive long-term investment. Overall this was a fundamental change in Government policy masquerading as a spending decision.

“So the gravity of the situation here is that the Government now appears not to believe in its own energy policy. Carbon capture storage has been part of the UK framework, not just under the Climate Change Act of 2008 but also under electricity market reforms.”

He said the Government’s announcement that carbon capture wasn’t economically viable, was unfair on the two major companies developing the technology in the UK – White Rose in Yorkshire and the Shell-led Peterhead Project in Scotland.

He said the companies understood that they had entered into the Government’s competition to win the £1bn cash prize on the understanding they didn’t need to show vast commercial competitiveness – just that the technology was commercially heading along the right lines.

He said: “The Government has effectively changed the goalposts with this at the last minute, four weeks before bids were to be submitted and that’s hugely politically damaging in terms of the incoherence of the Government’s position and wider implications for it’s engagement in Europe and nationally.”

A 300m euro grant handed to the White Rose project in 2014 to secure an initial 2,000 jobs and provide clean electricity to more than 630,000 homes will now be given back, according to Richard Simon-Lewis, of the company Capture Power which runs the White Rose scheme.

He said there is £26bn of European money available through the Juncker Plan which could be used to develop carbon capture in the UK, but Mr Simon-Lewis said it was too late for the White Rose scheme in Yorkshire.

“It’s fair to say the horse has vaulted.

“We are now in transition to closure mode,” he said, although admitted there was scope for the industry if there was Government support.

Luke Warren, chief executive, of the Carbon Capture Storage Association, said: “There’s a strategic risk for the UK not developing capability in this area because it’s likely to push up our energy costs and whether we can run our energy intensive industries.”