By Will Nichols, Source: BusinessGreen

The government has been warned its failure to secure €600m of EU funding for UK carbon capture and storage (CCS) projects has “dealt a slap in the face” to developers and could delay the deployment of the technology. Energy and Climate Change Secretary Ed Davey confirmed on Thursday that as expected, the three UK projects put forward have not been awarded any funds from the first tranche of the €1.5bn NER300 fund set aside by Brussels for CCS and renewables projects. “It is true that we did not get in the first round of the NER300 funding from the EU,” Davey said without specifying why. The Department of Energy and Climate Change had not responded to a request for comment at the time of going to press. Rumours abound that the Treasury has refused to reassure the European Commission it would co-fund the projects, which the government has denied. However, Chris Davies, a Liberal Democrat MEP who has campaigned strongly for CCS, put the blame squarely on government divisions. “The UK has let down the whole of Europe in making this decision and dealt a real slap in the face to the many companies who have invested large amounts of time and money in developing some of the best CCS projects in the world,” he told BusinessGreen. “Even in its early stage of development CCS looks financially attractive when it comes to the amount of electricity that can be generated with minimal emissions.” UK companies involved in the projects including Drax, Alstom, and National Grid, as well as trade body the CCS Association (CCSA) wrote to the Commission last month asking for time to get those reassurances in place. Now it appears they will have to compete for around €300m in the second tranche of funding expected this year. Jeff Chapman, chief executive of the CCSA, told BusinessGreen the loss of EU finance must not be allowed to delay the development of CCS. “If [waiting for the second tranche] causes any further delay to the projects then that would be disastrous,” he said. “We have to assume we won’t get a contribution from Brussels and get on with it.” Davey confirmed the UK would not receive funding after unveiling the Energy Bill, which contained measures to support CCS technology such as long-term contracts for guaranteed electricity prices and an updated emissions performance standard that should ensure new coal plans cannot be built without CCS. Last month the government unveiled a short list of four projects in line to win its £1bn commercialisation competition, but controversially omitted the Don Valley Power Project in Yorkshire, which was first in line for EU funding.