UK Decarbonisation and Carbon Capture and Storage

Tom Blenkinsop Excerpts

Tuesday 24th January 2017 Westminster Hall

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I congratulate the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) on securing this debate. His contribution was really good, technically sound and showed his background in the subject.

First, let me state that carbon capture and storage is an absolutely necessary component of the solution to our energy trilemma. It offers the opportunity to meet our emissions targets, provide energy security and take advantage of the natural resources and high-level skills of our nation. It is necessary because any conceivable energy future will require the burning of fossil fuels.

I encourage anyone who doubts the significant and important role that hydrocarbons will continue to play in meeting the UK’s energy needs to read Lord Oxburgh’s report. He concludes that to meet our heating needs we must continue to rely on natural gas, produce huge quantities of hydrogen gas or supply heat through electrification, which in turn would require new fossil fuel power stations. Any of those paths will produce large amounts of CO₂ and will therefore require effective carbon capture technology to meet our environmental targets.

The main challenge in developing such essential technology is achieving value for money. As the recent National Audit Office report found, the Government’s carbon capture technology competitions did not offer that. I hope, however, that the Government accept that the technology is still necessary to meet our environmental targets and will commit to creating a more cost-effective approach to building the technology in the UK, rather than letting CCS innovation, research and expertise leave the UK and create jobs, investment and opportunities elsewhere—that the Government are willing to take on some of the risks of developing the new industry in order to reap the economic and environmental benefits down the line.

I hope that in designing a new CCS competition, the Minister will take on board the NAO report’s findings to improve clarity on the risks carried by projects and on the financing the Government are willing to commit to, as well as draw on the lessons learned through stakeholders. I also hope they will look closely at the work done by the Carbon Capture & Storage Association, which points to circumstances under which CCS technology can offer value for money—namely, the strike price of £85 per MWh recommended by the Lord Oxburgh report—from the start.

I am interested to hear what other options the Minister has considered for implementing CCS, such as the possibility of doing so as part of a business model that relies on utilising indigenous sources of hydrocarbons, such as gasified coal. In short, I hope that the Government continue to explore options for supporting this vital technology. I know there are Members from all parties who would support them in doing so.

Finally, I want to point to areas where carbon capture technology is already proving cost-effective. Carbon capture and utilisation technology captures CO₂ produced by manufacturing plants or smaller generators and uses that CO₂ to produce highly marketable green products. A British company, Carbon Clean Solutions, currently leads the world in this technology and, as I am sure the Minister is aware, has recently successfully implemented CCU technology on a commercial basis in Tuticorin, India. Carbon Clean Solutions has successfully managed to take the CO₂ produced by a chemical plant and produced soda ash, which in turn can be used to make glass, paper and a range of other products. The fact that the soda ash produced is green means it can be sold on at a premium to companies attempting to reduce their environmental footprint.

It seems bizarre that such technology, developed by a British company in co-operation with British universities and in part funded by grants from the British Government, has not been helped to take root in Britain. Although I understand that the technology does not operate on nearly the same scale or offer the same environmental impact as larger CCS projects, it also has advantages. For example, the smaller scale of the project means a smaller risk for investors. Indeed, Carbon Clean Solutions believes it requires only a guarantee on initial investment to get started in Britain, and that in turn offers the Government the opportunity to learn lessons in carbon capture technology that can then be fed into the development of larger projects.

Although the nationwide impact of CCU technology may be small, such technology could help our energy-intensive industries to reduce their emissions and give them a competitive edge. Furthermore, much of the infrastructure needed for CCU is already in place in former and current industrial areas such as Teesside. If we were to look at this project in combination with decarbonising our economy by using the gas grid, we would see a multitude of potential options for the existing energy-intensive industries to take hold of and entrench their position and also develop new green industry. That is a particular advantage, given that the NAO report highlights the “lack of supporting infrastructure” as a major barrier to investment in larger CCS projects.

Electrification obviously implies a vast amount of capitalisation—in the trillions—and a lot of capital to begin to even touch the sides of electrifying our transport, but we are the one nation in the world that has a unique gas grid that we could utilise in combination with hydrogen gas and shale gas, and using blends within the gas grid to overcome those obstacles.

Will the Minister meet me and Mr Ani Sharma, the chief executive officer of Carbon Clean Solutions, to discuss the potential of his company’s technology and how the Government can help CCU technology to mirror its commercial success in India closer to home? Carbon capture and utilisation may not have the environmental impact that successful large CCS projects would, but it can act as a stepping stone to achieving those vital CCS projects that are the only way we will be able to move towards a decarbonised energy sector.

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[Sammy Wilson (East Antrim) (DUP)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) on introducing the debate. I suspect he will quickly find that we are not on the same side, but it is important, especially in the week when the Government have launched their industrial strategy, to have serious debates in the House on current and future energy policy. Of course, no industrial strategy can sit in isolation from a realistic energy strategy.

The first point of contention I want to make is that we seem uncritically to have accepted the mantra that we must decarbonise energy production. I know people say we have the Paris agreement, climate change obligations and so on, but we also need to look behind the mantra to see what the term means and has meant, and how it currently affects households, industry and business in the United Kingdom. The old Department of Energy and Climate Change estimated that to decarbonise the electricity and energy industries effectively by 2040, we needed 40,000 offshore and 20,000 onshore wind turbines and a new fleet of nuclear power stations, and that all coal and gas use would have to be subject to carbon capture and storage. That would happen at enormous cost, and we have already seen the impact on fuel poverty.

According to the Scottish household survey, there was a 25% increase in the number of households in fuel poverty in Scotland between 2011 and 2013. In Northern Ireland, there was an increase of nearly 100%. Why? Fuel bills go up because we have decided we want to produce energy more expensively. That is the first thing we need to realise in the debate. Decarbonisation means significant costs to the economy. Of course, this is at a time when we are talking about becoming more globally competitive, and when China and India, which signed the Paris agreement, tell us that every year they will increase their CO₂ by the amount of our total CO₂ emissions.

[Tom Blenkinsop]

I understand the hon. Gentleman’s frustration, but I see what we are doing as investment. Renewables, whether photovoltaic or wind-generated energy, have the capacity to be used, for example, in the creation of hydrogen gas. There is a future in which we could create gas at zero cost, with surplus renewable electricity for the consumer. In transport network terms, the ability to spread that around the country is vast. I see it as an investment that is expensive at the moment, but whose rewards we will reap if we stick to those commitments.

[Sammy Wilson]

Of course the people who pay for that expensive investment are the taxpayers, because there is less money for other public services; electricity consumers; and workers who lose jobs in the industries that can no longer compete.