In his first offical engagement since taken over from Chris Huhne at the Department of Energy and Climate Change (Decc), Davey sought to reassure proponents of CCS that the technology remained part of government plans and that it would be backed with funds.
The government has said it will provide £1 billion funding towards CCS, and energy minister Charles Hendry recently confirmed the funding was ring-fenced but had been reallocated dugint the current spedning period. However, a Decc spokesman insisted that did not necessarily mean it would not be available until 2015. “The money is available for projects when they need it,” he said. “We want companies to be sure that money is available to them when they are making investment decisions.”
Other funding for CCS is available from the EU, and Decc has said its fund may need to be aligned with EU cash. But the size of the so-called NER300 fund is dependent on the price Brussels can get for the 300 million carbon allowance it is selling to capitalise it. With carbon prices plummeting in recent months, the CCS industry have also worried that eventually financing projects is beginning to look even more difficult.
Davey though said CCS is “crucial to a low carbon future for our planet” and that government would work with industry to turn it “into reality”.