Abby L. Harvey
GHG Monitor
9/12/2014
Two planned carbon capture and storage projects in the United Kingdom carry “unacceptable” levels of risk for the government to make a final investment decision at this time, the UK Government wrote in a response published late last week to a May 2014 report by the House of Commons Energy and Climate Change Committee. The Energy and Climate Change Committee report called on the Government to make final investment decisions on the two proposed CCS projects remaining in the government funded CCS Commercialisation Programme, White Rose and Peterhead, by early 2015. However, in its response, the Government said the committee’s recommendation was unreasonable. “The Government recognises that the Committee has called for final investment decisions to be reached by early 2015, but it is not realistic for either Government or the developers to take multi-billion pound investment decisions until there is sufficient confidence in the engineering designs and costs,” the response says.
The Government response notes that both projects are currently in the process of conducting Front End Engineering Design (FEED) studies, which the government signed contracts for in December 2013 and February 2014. According the document, the government invested roughly £100 million in the FEED studies. At the completion of the FEED studies, the government may consider making a final investment decision, the response says. “The Government will continue to encourage developers to complete their FEED studies and provide that confidence as quickly as possible, but it is important to note that to maximise confidence in delivery, the projects are expected to undertake a significant amount of work over the remaining months to the end of 2015. During this period both projects will also need to obtain the necessary planning permission and consents which includes extensive public consultations; and detail their commercial structures for delivering the projects including engagement with the investment and finance communities. Until FEED is complete, projects carry unacceptable and/or unquantifiable levels of risk for either Government or the developers to take a decision to invest,” the response says.
