Clean up our act

In his independent review of the economics of climate change the former chief economist at the World Bank, Sir Nicholas Stern, concluded that the scientific evidence is now overwhelming — climate change is a serious global threat that demands an urgent, collective global response, and the role of new technologies will be crucial.

One of the most exciting developments, and something the Stern Report singled out as particularly significant at the global level, is carbon capture and storage (CCS).

I believe, as do Sir Nicholas and many other experts that development of CCStechnology is vital if we are to reduce emissions and at the same time ensure we have secure energy supplies. This is because, unlike all other low carbon technologies already developed or being developed, it would permit us to continue using fossil fuels to generate electricity in a cleaner way.

Successful capture and storage would enable us to reduce CO

emissions from fossil fuel power generation by up to 90 per cent. This is vital in a world where, for example, global demand for coal is set to grow by over 70 per cent by 2030 and where China alone built an average of one new coal-fired power station every four days in 2006.

Coal is abundant in the world, is easy to transport and store and has a high calorific value. So it is inevitable that countries with large reserves, developed and developing, will want to use them.

It is also likely that utilities will continue to use well-tried pulverised coal technology for generating capacity, particularly by emerging economies seeking very rapid increases in power generation capacity to fulfil unmet domestic demand.

The advantage of CCS is that it has the capability for large-scale clean electricity generation and is also relevant to energy-intensive industrial processes.

The government's analysis is that post-combustion capture is the most relevant technology to the vast proportion of existing coal-fired generation capacity, which makes it the most globally relevant. That's why last November we announced the launch of a competition to support the world's first commercial-scale CCS post-combustioncoal-fired project, with CO

stored offshore.

We will consider a phased approach to the project as long as the full CCS chain is demonstrated by 2014. Only two other countries (the US and Norway) are currently committed to commercial demonstrations, but are using different technologies. The UK project complements these — Norway is demonstrating post-combustion on gas, and the Futuregen project in the US focuses on pre-combustion capture on coal — and all three are scheduled to be operational around the same time.

A commercial-scale demonstration opens up huge possibilities, not just for the UK but also for the world. Post-combustion capture technology can be retro-fitted to existing coal-fired plants, so will play a vital role in tackling climate change and the transition to a low-carbon economy in China and India.

Our experience will have global relevance but it's important for other reasons. Closer to home it will mean that by 2030, wider deployment could see up to a third of the UK's electricity generated in this way using a variety of different capture technologies. Additionally we'll be building industry capability, and UK exporters of CCS technology and expertise could be cornering global business worth many billions.

The government recognised early on that work on the regulation of CCS needed to be undertaken in parallel with technological developments. I'm pleased to say we're already acknowledged as a leader for the work we have done to develop a regulatory framework for CCS, and we intend to consult on the details of the framework as well as the concept of 'capture readiness'.

The Energy Bill which went before Parliament in January puts in place the regulatory building blocks needed for a low carbon future. Measures in the Bill, including a greater deployment of renewables, the overarching regulatory framework for the storage of carbon dioxide offshore required for CCS, and offshore gas infrastructure, will help ensure our energy security, reduce emissions and place the UK at the forefront in the development of low carbon energy technology.

The principal objective of the Bill is to update the legislative framework so that it's more appropriate for today's energy market. New legislation will enable the development of CCS and emerging renewable technologies, and together with the Planning and Climate Change Bills, will underpin our delivery of long-term energy and climate change strategy.

The decision to support a coal-firedpost-combustion project reflects our objectives to demonstrate technology that is relevant and transferable to key global markets (particularly in emerging economies) and not a lack of confidence in alternative technologies. We are not picking a technology winner — we expect to see all CCS options rolled out once they have been successfully demonstrated — and the development of all CCS technologies, as well as post-combustion options, is welcomed and supported.

If we are to achieve the global reductions in carbon dioxide emissions required to stabilise our climate, CCS must be deployed worldwide. I'm pleased to say that the government is rising to this challenge and leading the way with its demonstration project and wider programme of activity.