Technology to trap carbon emissions from coal- and gas-fired power plants and store it underground has the potential to be cost-competitive with other green energy in the U.K. by the early 2020s, a government adviser said.
The government needs to set out policies and financing to push down costs in the industry to achieve that goal, the Carbon Capture and Storage Cost Reduction Taskforce said in a report. It should spur use of captured carbon dioxide to increase oil extraction, find sites to store and ways to transport the gas.
By the early 2020’s CCS has the potential to cost about 100 pounds ($152) a megawatt-hour, and less soon after, according to the report. Coal-fired power now costs about $83.4 a megawatt-hour, according to researcher Bloomberg New Energy Finance.
The report identifies a gap in policy and funding for CCS in industry, Jeff Chapman, chairman of the taskforce, said in an e-mailed statement. The group will work with the business and energy ministries to “fill this gap,” said Chapman, also chief executive officer of the Carbon Capture & Storage Association.
The U.K. in March selected two projects led by companies including Royal Dutch Shell Plc and Drax Group Plc as preferred bidders for 1 billion pounds of funding for CCS.
The Department of Energy and Climate Change will make an investment decision to build one or two projects in early 2015, with facilities slated to begin operating from 2016.