AN axed UK Government competition to develop carbon capture and storage technology cost the taxpayer £100 million, a report reveals.
Shell’s scheme at Peterhead was one of two preferred bidders for the Westminster-run contest when it was scrapped at major cost to the public purse.
Details have emerged today in a report from the National Audit Office (NAO), a day after the Scottish Government unveiled plans to slash greenhouse gas emissions by 66 per cent within 15 years through a scheme involving carbon capture and storage (CCS).
Environment Secretary Roseanna Cunningham said Scotland had exceeded its target to deliver a 42 per cent reduction in 2014, six years ahead of schedule.
Ministers now aim to reduce harmful gases by more than 50 per cent by 2020, with an overall target of 80 per cent by 2050.
She said: “We have done well but together we must do more.”
Though unproven, it is argued that (CCS) could play a major role in reducing the UK’s environmental impact. Estimates suggest it could cost the UK Government £30 billion more to meet its 2050 greenhouse gas targets without the technology.
However, the Treasury pulled £1bn in capital funding from the CCS contest in late 2015, leading to its cancellation.
The Department of Energy and Climate Change (DECC), which is now part of the Business Department, had begun the programme three years earlier without securing an agreement with the Treasury on the amount of financial support available over the lifetime of the projects.
At the time of cancellation, only the White Rose consortium in North Yorkshire was left standing against the Peterhead bid, which would have seen CCS fitted to an existing gas plant run by energy giant SSE.
The NAO report said DECC initially estimated it would cost consumers, who would subsidise electricity from the schemes, between £2bn and £6bn over 15 years, but by 2015 this had risen to £8.9bn.
The report found the Treasury was concerned over the costs to consumers, and that the competition was aiming to deliver CCS before it was cost-efficient to do so, A previous CCS competition was cancelled in 2011 following a spend of £68m.
NAO head Amyas Morse said: “The department has now tried twice to kickstart CCS in the UK, but there are still no examples of the technology working.
“There are undoubtedly challenges in getting CCS established, but the department faced an uphill battle as a result of the way it ran the latest competition.
“The department must learn lessons from this experience if it is to stand any chance of ensuring the first CCS plants are built in the near future.”
According to Cunningham’s climate change plan, Scotland will have a fully decarbonised electricity sector by 2032 which will be able to remove CO2 from the atmosphere with the use of technologies such as CCS, with 80 per cent of domestic heat provided by low-carbon heat technologies.
Under the proposals, the proportion of ultra-low emission new cars and vans registered in Scotland annually will reach at least 40 per cent, while 250,000 hectares of degraded peatlands will be restored and at least 15,000 hectares of woodland will be created each year.
Both Labour and the Tories generally welcomed the plan, which Cunningham said would cost two per cent of GDP. However, Mark Ruskell of the Greens said the strategy “either rejected or only partially addressed” many of the 21 recommendations made by the Government’s adviser, the UK Committee on Climate Change.
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