Energy secretary Chris Huhne is being asked to clarify whether £1 billion in funding set aside for carbon capture and storage projects will still be spent in the current spending review period.
Chairman of the Energy and Climate Change Select Committee, Tim Yeo MP, has written to Chris Huhne after there were reports that the £1bn set aside for CCS would be reallocated as part of the government’s infrastructure drive.
Chief secretary to the Treasury Danny Alexander reiterated that £1bn would go towards CCS projects in the House of Commons yesterday in response to a query from Labour/Co-Op MP for Rutherglen and Hamilton West, Tom Greatrex.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): In one of his earlier answers, the Chief Secretary to the Treasury referred to the infrastructure fund announced last week. Given his comments of last week, can he confirm to the House precisely how much of the £1 billion allocated to carbon capture and storage will now be available for CCS projects before 2015?
The Chief Secretary to the Treasury (Danny Alexander): As the hon. Gentleman will know, the consequence of last week’s infrastructure announcement for Scotland is an additional £430 million to be spent in Scotland. We have said throughout this process that £1 billion is available for the carbon capture and storage project. The likelihood is that that project will be delayed because of the failure to agree the Longannet project, and we will make funds available as soon as the competition is completed.
A CCS development forum was established in July 2010, but in October the government announced it would not be progressing with plans for the UK’s first CCS project at Longannet power station in Fife.
In a statement issued on 19 October, the government said: “The decision balances the UK’s low carbon ambition with the need to ensure taxpayer’s money is invested in the most effective way. £1bn will be available for a new process and we are expecting a number of promising bids from both Scotland and England.”
However before the autumn statement there was speculation that the CCS budget would be transferred to other infrastructure schemes.
Mr Yeo, in a letter to Chris Huhne, stated: “My committee was shocked by reports that the £1 billion set aside by the government to develop a carbon capture and storage demonstration project would be borrowed for other purposes and little comforted by the Chancellor’s remarks in the debate on the Autumn Statement.
“The Chancellor said that the government was “still committed to a £1 billion investment, which is a very significant investment in a technology, but it cannot be on an unrealistic timescale”. However, the timescale of deploying CCS in the 2030s will be rendered unrealistic if a demonstration is not underway soon.”
Mr Yeo has asked (see attached letter) for clarification on how much of the £1bn will be transferred to other projects and whether the government will now revise its timetable for the first demonstration project to be completed construction by 2014/15.