Speech to Doosan Babcock carbon capture oxyfuel demonstration opening

It is a great pleasure to join you today and I am very pleased to have the opportunity to be associated with the launch of this CCS demonstration project.

In October last year the Prime Minister set up a new Department of Energy and Climate Change – indicating the importance that he places on these issues – and I am fortunate to be a Minister in that Department. Our focus is to secure our energy supplies whilst moving the country to a low carbon economy and achieving a global climate change agreement at Copenhagen in December this year.

We know we must act and act urgently. Already we see the predictions of the climate scientists coming true – the sea level rises, the global temperature rises, and the erratic weather patterns.

In April, the UK became the first country in the world to bind itself into an ambitious long-term framework to limit its greenhouse gas emissions. We announced the UK’s first three ‘carbon budgets’ setting out new measures designed to help low carbon industries capitalise on the opportunities available.

Last week the Government launched its White Paper – the UK Low Carbon Transition Plan. The Transition Plan is a route map that will take us to an economy and society that is much less dependent on carbon as a source of energy. Every part of life will change: the power we use, our homes, where we work and the transport system.

To make this change requires enormous investment and will create unprecedented opportunities for companies to benefit from the markets it creates. And these opportunities will begin to emerge in the short term. For example, 40% of the country's electricity will come from low carbon sources by 2020, that will be double what it is today and will include the need for renewables, nuclear and clean coal.

Today I am delighted to witness at first hand companies intent on grasping those opportunities. The opening of this oxyfuel capture plant is an important step in the progression of CCS technology in the UK, and I particularly welcome the collaboration that has been shown on this project, where a number of companies have joined together to make it possible.

Collaboration is vital to the development of CCS and the swift progression of this important technology. Our ambition is for CCS to be proven from 2020 and we need to see continued demonstration, collaboration and innovation both at pilot and commercial scale if we are to achieve this.

We welcome the tremendous investment Doosan Babcock are making in this technology in the UK, as well as Doosan Heavy’s international presence, particularly in the Far East.

These kinds of links will help with the global roll-out of CCS which is central to our objectives.

This project is one of the first the Government will back to develop carbon capture and storage technology. But we are now doing more to drive forward both ongoing R&D and commercial scale demonstration in the UK and overseas in order to push the technology towards deployment.

Why clean coal is important
Clean coal in general and Carbon Capture and Storage in particular are vital technologies in the fight against climate change. It’s important that we get our policies right in this area. We can only do this with the support and participation of those organisations that are represented here today.

Current market signals have been sufficient to encourage electricity generators to invest in CCS up to about a tenth of the scale necessary for commercial deployment. But this will not be sufficient to prove CCS for deployment in the 2020s.

Government therefore had a choice to make. We could either wait for others to make the investment, or take the leadership role ourselves in global climate change mitigation - as well as helping to maintain future domestic electricity diversity by retaining fossil fuels in the electricity mix.

So what has the Government done so far?

We have made significant progress in CCS in the last two years:

• We’ve announced an intention to financially support one of the first commercial scale demonstrations of CCS anywhere in the world.
• We have completely reviewed our existing legislation as it applies to CCS, and introduced one of the first legal regimes anywhere in the world to permit the permanent storage of carbon dioxide offshore. We have modified the consenting regime for fossil fuel power stations to ensure that any new fuel power station has to be constructed Carbon Capture Ready and that this ‘readiness’ is kept under review. And I understand the Scottish Government has adopted a similar stance.
• We’ve been working actively in the global arena to ensure the UK’s efforts are part of a European and international effort to prioritise the development and deployment of the technology.
• We were instrumental in securing EU funding to support a programme of up to 12 EU demonstrations and a G8 commitment to launch 20 demonstration projects, and we’ve also played a leading role in developing and implementing the EU-China Near Zero Emissions Coal Initiative to demonstrate CCS in China.
• We have also announced most recently that an Office of Carbon Capture & Storage will be created to help drive the CCS agenda further.

We recognise that there is always more to do. Much has happened over the last few months to highlight the importance of CCS. On the 17th June we launched the consultation – A framework for the development of clean coal. That consultation remains open until 9 September.

The proposals include the introduction of a financial mechanism to provide funding for up to four UK CCS demonstrations, including the current demonstration project and a requirement that any new coal power station would have to demonstrate CCS on at least 300 mega watts.

After CCS has been judged to be proven, there will be a period of five years to retrofit CCS to the full capacity of a power station. We are also preparing for the possibility that CCS will not be proven as quickly as we expect by considering measures to limit emissions from coal power stations, for example, emissions performance standards.

Internationally, this year is a very important year as I’ve indicated for climate change negotiations. The UK is hosting the Carbon Sequestration Leadership Forum Ministerial Meeting in London this October – a key opportunity to make progress on CCS ahead of the Copenhagen talks.

So in conclusion I would just say that together these changes will provide one of the most advanced policy frameworks anywhere in the world to regulate the development of new and clean coal.

So we believe the UK is moving in the right direction, providing leadership internationally, building the foundations and creating an appropriate framework for the deployment of CCS - as well as providing funds to encourage its demonstration. It is critical that we continue to have the strong involvement of industry in taking these new technologies to the market – and I would urge everyone here who has an interest to respond to our clean coal consultation.

Coal will continue to be a vital part of the UK energy mix but it is even more significant in emerging economies, such as India and China with their phenomenal growth rates and millions of people still in need of basic energy supplies.

The world’s best climate scientists tell us that if we don’t reduce our emissions dramatically and get onto a low carbon path we will suffer catastrophic climate change.

In the UK we will not only take on our share of what is necessary to reduce emissions. We will lead by example – accepting our moral responsibility and doing so in such a way as to secure our energy supplies, create new jobs and adopt a prosperous, innovative low carbon economy.

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