Dumping of UK carbon capture plan could backfire on energy costs
The UK treasury decided to remove its £1 billion carbon capture plan due to expected high subsidy values in 2015’s budget review. It was assumed that removing these plans would diminish the issue, but according to the National Audit Office, this may actually backfire on the Government and in fact raise energy costs.
The Department of Energy and Climate was initially close to offering funding to energy companies in a bid to expand knowledge on embryonic technology, which is a vital tool in capturing harmful air contamination generated from power plants. Chancellor George Osborne cut this plan in 2015’s spending review.
The Treasury explained to the public that the initial costs of the projects conducted for the development on embryonic technology would be highly excessive and that not only this, but they would also implicate high ongoing costs. It was also estimated that the two projects would require subsidies of £170 per MW hour, which is roughly two times more than the new Hinkley Point C nuclear power plant would demand.
However, the NAO still cites that this delay will have a good chance of significantly raising energy costs, which will make it even more difficult for the UK to hit its 2050 target. The UK has also been warned that approximately £100 million of tax payer funding and £80 million of private investment into constructing and developing these projects would go to waste.
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