Isra-Mart srl: UK preparing the ground for second CCS competition

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The government is seeking views from potential carbon capture and storage (CCS) project developers to help with its plan to fund three second-generation demonstration schemes.

The consultation exercise will run from 21 June to 1 July, and is being organised by the Office of Carbon Capture and Storage (OCCS), which was created within the Department of Energy and Climate Change (DECC) last year to promote the technology and ensure that the UK has four projects up and running by 2020.

OCCS wants to know about any projects being considered, especially gas projects, as well as details of any business plans developers are working towards.

Of particular concern is gaining an understanding of how the office can manage its funding arrangements, timings and selection processes to expedite schemes and work out effective methods for sharing risk between the private sector and government.

"We now want to hear more from potential project developers and investors as we gear up to launching the selection process for the three additional CCS demonstration projects later this year," said a DECC spokesman.

"We aim to have agreed commercial terms for the first demonstration, for which up to £1bn was set aside in the Spending Review, by the end of this year, with construction complete by 2014/15, and all four demonstrations operational by 2018/20."

OCCS is keen to build on the "market sounding exercise" that it ran for developers last year, covering issues including financing risks, storage liability and the Committee on Climate Change's recommendation to include at least one demonstration on a gas fired plant in the programme.

DECC has since announced that projects two to four will consider supporting CCS on gas-powered plants, and that the feedback will inform the design of the demonstration programme's objectives and deliverables, and of the selection process and criteria against which proposals will be assessed.

The government has been criticised for dragging its feet over approving the first demonstration project, after proposals backed by BP, E.ON and RWE npower were withdrawn, leaving only ScottishPower's scheme at Longannet, Fife in contention for the £1bn prize.

On top of the four plants supported by public funds, the UK has also submitted seven projects to be considered for a share of a €5bn European pot known as NER300, which should see eight CCS and 34 renewable energy plants built across the continent.