Framework for development of clean coal: consultation response

We welcome the broad thrust of the draft framework for the development of clean coal. We are particularly pleased to note the emphasis on a diverse range of measures for mitigating climate change, the recognition that both market-based and regulatory approaches to encouraging the deployment of CCS are valuable, and the suggestion that the proposed requirement to demonstrate CCS should apply immediately. We make several suggestions on matters of detail in response to the consultation questions. Specifically, we suggest the establishment of a process of continual review of the realistic capacity of carbon dioxide storage reservoirs. We further suggest that, to allow for the rapid rate of generation of new scientific information, the following are needed. First, an explicit, quantitative statement of the timescale that government considers sufficient for a reservoir to store carbon dioxide securely. Second, an explicit, quantitative statement of the level of leakage risk that government considers acceptable. Third, the publication of plans to accelerate the release into the public domain of seismic, borehole log, well injection test, and drilling record data generated by the private sector. Fourth, an explicit statement of government’s view on the extent to which bio-fuel power stations should be covered by regulations requiring carbon capture readiness. Finally, the production of a companion document establishing similar principles for the retrofit of carbon capture and storage systems at existing power stations. We also note the importance of potential CCS operators having robust plans for monitoring their storage reservoirs, using monitoring technologies that have been thoroughly demonstrated to be of sufficient accuracy and precision. In addition to these technical matters, we make several suggestions about the financial and regulatory aspects of the path to CCS deployment. First, we urge the early production by government of detailed criteria for deciding whether CCS is technically and economically proven. Second, we suggest the adoption of measures to counter any disincentives to private-sector funding of carbon capture and storage research. Third, we point out that the judgement as to whether CCS is technically and economically proven may need to be a continual and site-by-site process, starting as soon as reasonably practicable. Fourth, we propose that the starting date for the requirement to retrofit be left open (but certainly no later than 2025). This will allow for flexibility should CCS be technically and economically proven in advance of 2020. Fifth, we suggest that the proposed levy on electricity suppliers could be linked to carbon emissions. Sixth, we urge further consideration of the relative positions of coal and natural gas, with respect to the requirement to retrofit. Seventh, we ask for a more detailed definition of the crucial phrase “best attainable standards” for judging the efficiency of existing power stations proposed as CCS demonstration sites. Eighth, we suggest that it may be helpful if public funding for demonstration projects is protected from late-stage withdrawal through the spending review. Ninth, as an alternative to the proposed requirement to cease operation of power plants that fail to operate the CCS chain, we propose a mechanism for government to take over the running of such plants. Tenth, we urge extra care to be taken over the equity implications of co-location of demonstration projects. Finally, we note that it may be useful to address the rôle of perceived risk in suppressing private CCS investment as part of a wider review of how government can influence levels of risk aversion in the investment capital markets.